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Ahead of the Bell: US trade gap

September 3, 2015

WASHINGTON (AP) — The Commerce Department reports on the U.S. trade gap for July at 8:30 a.m. Eastern Thursday.

SMALLER DEFICIT: The expectation is that the deficit narrowed slightly to $42.6 billion in July, according to a survey of economists by data firm FactSet.

US DEMAND: The deficit in June widened by 7 percent to $43.8 billion, up from $40.9 billion in May, as solid consumer spending pulled in more imports while the strong dollar restrained exports.

Economists expect the July deficit will narrow a bit because they believe U.S. exports rose a bit and imports declined.

Trade has been volatile this year. Labor disputes at West Coast ports in the first quarter delayed imports and the shipment of U.S. goods overseas. That lowered exports and pushed the deficit to $50.6 billion in March, a three-year high.

Trade subtracted nearly 2 percentage points from overall economic growth in the first quarter, when the economy, as measured by the gross domestic product, slowed to a growth rate of just 0.6 percent. A narrowing of the deficit in the April-June period left trade adding a modest 0.2 percentage point to growth in the second quarter, when the GDP rebounded to a gain of 3.7 percent.

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