(RTTNews) - With imports spiking by more than exports, the Commerce Department released a report on Thursday showing the U.S. trade deficit widened by much more than expected in the month of July.
The Commerce Department said the trade deficit expanded to $63.6 billion in July from a revised $53.5 billion in June. The deficit in July was the widest since reaching $67.0 billion in July of 2008.
Economists had expected the trade deficit to widen to $58.0 billion from the $50.7 billion originally reported for the previous month.
The wider than expected deficit came the value of imports surged up by 10.9 percent to $231.7 billion in July after jumping by 4.6 percent to $208.9 billion in June.
Imports of automotive vehicles, parts and engines showed a substantial increase, while imports of industrial supplies and materials, capital goods and consumer goods also saw notable growth.
Meanwhile, the report said the value of exports jumped by 8.1 percent to $168.1 billion in July after spiking by 9.6 percent to $155.5 billion in June.
Exports of automotive vehicles, parts and engines also saw significant growth along with exports of consumer goods, industrial supplies and materials and capital goods.
"Overall, the data suggest that trade is set to subtract close to 1% annualized from third quarter GDP - slightly bigger than we originally anticipated," said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, "But we suspect that will be offset by a positive contribution from inventories and in any case, those numbers are small beer compared to our forecast of a 30% annualized rebound in overall GDP."
The Commerce Department noted the goods deficit widened to $80.9 billion in July, while the services surplus narrowed to $17.4 billion.
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