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August 29, 2019 10:45 AM, EDT

US Goods-Trade Deficit Narrowed to Three-Month Low

Trucks drive over border Patrick T. Fallon/Bloomberg News

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The U.S. merchandise-trade deficit unexpectedly narrowed in July to a three-month low as exports picked up and imports declined.

The gap shrank to $72.3 billion in July from $74.2 billion the month prior, Commerce Department data showed Aug. 29. That compared with forecasts of a widening to $74.4 billion. Exports increased 0.7%, and imports dropped 0.4%.

Imports and exports of goods shrank in the second quarter, weighing on the economy, and the latest figures will offer a glimpse of how trade will impact gross domestic product in the third quarter.

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Aug. 29 data comes just before a 15% levy is placed on another batch of Chinese goods Sept. 1. Since May, President Donald Trump has announced a series of higher tariffs on imports from China.

The gain in merchandise exports reflected more overseas shipments of capital equipment, motor vehicles and consumer goods. Meanwhile, imports of capital goods declined.