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August 6, 2014 8:40 AM, EDT
Trade Gap Shrinks to Five-Month Low as US Imports Drop
Patrick T. Fallon/Bloomberg News

The trade deficit in the U.S. unexpectedly narrowed in June, reflecting the biggest drop in imports in a year as the economy moved closer to energy independence.

The gap shrank 7 % to $41.5 billion, the smallest since January, from May’s $44.7 billion, Commerce Department figures showed.

The median forecast in a Bloomberg News survey of 66 economists called for a deficit of $44.8 billion. The drop in purchases of foreign goods included declines in autos and cellular phones, while petroleum imports were the lowest in more than three years.

Demand for goods made overseas will probably rebound in coming months, helped by growing household spending and business investment. Exports were little changed at a record, a sign markets overseas will represent less growth for American factories as Europe’s economy struggles to pick up.

“The U.S. is at a better point in the economic cycle than the rest of the world, that means the trade balance should worsen a bit as imports pick up,” said Sean Incremona, senior economist at 4Cast Inc. “The trend in exports isn’t all that great, given the lack of external demand.”

Bloomberg survey estimates ranged from trade deficits of $41 billion to $46.7 billion. The Commerce Department initially reported a $44.4 billion shortfall for May.

Imports dropped 1.2 %, the biggest decrease since June 2013, to $237.4 billion from $240.3 billion in the prior month. Purchases of autos and parts declined by $1.07 billion and demand for cellular phones fell by $1.12 billion from the prior month.

Imports of petroleum, at $27.4 billion, were the lowest since November 2010. The nation’s trade deficit on the fuel declined to $14.7 billion, the narrowest since May 2009.

Excluding petroleum, the trade shortfall declined to $26.9 billion in June from $29.5 billion.

Exports edged up by 0.1 % to a record $195.9 billion. Sales of civilian aircraft, pharmaceuticals and chemicals were among the biggest gainers.