WASHINGTON — The trade deficit narrowed significantly in July as exports climbed to the highest level in nearly two years, reflecting big gains in sales of U.S.-made airplanes and other manufactured goods while imports declined.
The July deficit fell 14 percent to $42.8 billion, the Commerce Department reported Thursday. That was much lower than economists had forecast. The lower trade deficit should give a boost to overall economic growth.
Exports rose 1.8 percent to $153.3 billion, the best showing since August 2008, as sales of jetliners, industrial machinery, computers and telecommunications equipment all posted large gains.
Imports, which had been surging, dropped 2.1 percent to $196.1 billion.
Imports of oil edged up a slight 0.1 percent to $26.8 billion but demand for other foreign products fell sharply. Imports of autos dropped by $713 million while those for other consumer goods such as clothing, televisions and toys all dropped sharply. Demand for business machinery and other capital goods also declined.
The drop in demand for imports reflected the slowdown in the U.S. economy during the spring as businesses cut back on rebuilding inventories and consumer demand slackened under the weight of high unemployment.
The surge in the trade deficit in the second quarter had trimmed 3.4 percentage points in the April-to-June quarter, leaving the gross domestic product rising at an anemic rate of 1.4 percent in the spring. The narrowing of the deficit in July, if it continues, could give a boost to GDP growth in the third quarter.
