The U.S. trade deficit fell sharply in June as exports increased to their highest level in 2-1/2 years, a positive development for the economy.
The Commerce Department said on Friday the trade gap decreased 5.9 percent to $43.6 billion, the lowest level since October 2016. May’s trade deficit was revised slightly down to $46.4 billion from the previously reported $46.5 billion.
Economists polled by Reuters had forecast the trade shortfall narrowing to $45.0 billion in June.
When adjusted for inflation, the trade deficit fell to $61.0 billion from $62.8 billion in May. Real goods exports surged to an all-time high of $126.9 billion in June, buoyed by record high petroleum exports.
The government reported last Friday that trade contributed almost two-tenths of a percentage point to the economy’s 2.6 percent annualized growth pace in the second quarter.
In June, exports of goods and services increased 1.2 percent to $194.4 billion,