The US trade deficit narrowed in June, marking the lowest level in nearly two years and supporting economists’ expectations of a rebound in economic growth in the second quarter. The decline was largely driven by a sharp decrease in imports, which fell 4.2% to $264.2 billion, led by a 12.4% plunge in consumer goods imports.
Meanwhile, exports slipped 0.6% to $178.2 billion, with capital goods and food shipments showing slight gains. The narrow trade deficit may contribute to a solid GDP headline, but weak details in other data suggest the economy is on uneven footing.
The labor market also showed signs of slowing down, with job openings decreasing 275,000 to 7.437 million and hiring dropping 261,000 to 5.204 million. While consumer confidence remains slightly above pre-pandemic levels, perceptions of current employment availability have deteriorated, according to a report from the Conference Board.
The data comes ahead of the government’s advance estimate of second-quarter GDP, which is expected to show a rebound at a rate of 2.4% after contracting in the first quarter. However, some economists warn that low inventories and tariff uncertainty may offset some of the growth boost.
As the Federal Reserve holds interest rates steady for now, the mixed signals from the economy suggest it’s still uncertain whether a strong second-quarter GDP growth will materialize.
Source: https://www.reuters.com/world/us/us-goods-trade-deficit-shrinks-likely-boost-second-quarter-gdp-2025-07-29