Next, the Commerce Department released its advance take on goods trade balance USGBAL=ECI and wholesale inventories USAWIN=ECI for June.
The gap between the value of goods imported into the United States and those exported narrowed by 4.1% to $101.5 billion last month.
That's a mere $1.5 billion more than analysts expected.
In detail, exports fell by 1.8%, with industrial supplies, food/feed/beverages and capital goods falling 4.4%, 3.1% and 1.1%, respectively. This was softened by a 5.1% increase in automobile exports.
Imports, a GDP detractor, decreased by 2.6%, led by a 3.6% drop in consumer goods, with automobiles and food/feed/beverages both falling 2.5%.
Net trade has been a drag on GDP in all but two of the last 10 quarters. This week, the Commerce Department is due to take its first stab at second-quarter GDP.
"Despite a narrower trade gap in June compared to May, the merchandise trade deficit widened in Q2 from both Q1 and a year ago," notes Carl Weinberg, chief economist at High Frequency Economics. "A widening nominal trade deficit subtracts from national income growth."
Note: trendline gaps are the result of last fall's partial government shutdown.
The value of goods stacked in the warehouses of U.S. wholesalers rose by 0.3% last month, a repeat of May's upwardly revised print. The prior inventory build-up in anticipation of potential war-related supply chain bottlenecks appears to have wobbled back into some kind of equanimity.
"Big hits to GDP growth from net trade typically are partly offset, at least, by positive contributions from inventory-building, but this probably was not the case in Q2," says Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.
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