Trade Deficit Widens on US Economic Strength

- The trade deficit for July widened to -$68.0 billion versus estimates of -$65.5 billion and -$64.8 billion in June.

BOTTOM LINE: The US trade deficit widened more than forecast in July to a record $68 billion as imports reached an all-time high and exports declined for the first time in five months, Bloomberg reported. The trade deficit with China fell to $19.6 billion from $19.7 billion in June. A US economy that is still outpacing those economies of most of its major trading partners may keep the trade deficit elevated even as the price of energy declines. I expect the trade deficit to improve slightly over the coming months as falling commodity prices offset some of the effects of relative US economic strength.