September 2, 2016 10:10 AM, EDT

America’s Trade Deficit Narrowed in July More Than Forecast

Port Manatee

The U.S. trade deficit narrowed in July more than forecast as the value of shipments to overseas customers reached a 10-month high.

The gap shrank 11.6% to $39.5 billion from $44.7 billion in the prior month, Commerce Department figures showed Friday in Washington. The median forecast in a Bloomberg News survey of economists called for a $41.5 billion deficit. The pickup in exports was driven by a record value of foods shipments, including a jump in sales of soybeans.

While goods and services imports declined in July for the first time in four months, resilient spending by American households suggests growing shipments from overseas producers. Meanwhile, the increase in exports indicates foreign demand is starting to stabilize.

Bloomberg survey estimates of the trade deficit ranged from $38.7 billion to $46 billion.

Exports increased 1.9% to $186.3 billion, reflecting an all-time high of $14.7 billion in shipments of foods, feeds and beverages, the Commerce Department data showed. Shipments of soybeans more than tripled from the previous month.

Imports fell 0.8% to $225.8 billion. The decline was fueled by fewer purchases of capital equipment, pharmaceuticals and mobile phones.

Excluding petroleum, the trade shortfall narrowed to $53.8 billion from $59 billion.

After eliminating the influence of prices, which renders the numbers used to calculate gross domestic product, the trade deficit shrank to $58.3 billion, the smallest in three months, from $64.5 billion.

The report also showed the trade gap with China, the world’s second-biggest economy, widened to $30.3 billion from $29.8 billion.