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US trade deficit hits record in June as imports balloon

·1-min read

A surge in imports of industrial supplies drove the US trade deficit to a record in June, according to government data released Thursday, a sign global supply chains may be coming back online after the pandemic disruptions.

The trade gap widened by $4.6 billion to $75.7 billion, a nearly seven percent increase compared to May, the Commerce Department reported. That was higher than analysts had expected and beat the previous all-time high set that month.

Imports of goods and services jumped $6 billion, most of which was accounted for by the rise in industrial materials and supplies such as iron, steel and chemicals, as well as a $1.2 billion increase in non-monetary gold.

US purchases of imported consumer goods, including autos, actually fell in the month, according to the report.

Exports also rose but gained just $1.2 billion compared to May.

As the world's largest economy has reopened and recovered faster than other regions, American businesses have reported struggles getting a steady supply of inputs.

"Supply chain disruptions are a risk but trade flows should rebalance as global economies come back online more completely," said Rubeela Farooqi of High Frequency Economics.

The lifting of pandemic restrictions allowed travel and tourism -- categorized as a service export -- to increase $400 million in the month, according to the data.

The US trade deficit with China in goods alone narrowed slightly to $27 billion, while gaps with the European Union, India and Japan all increased by around $1 billion.

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