The U.S. trade deficit narrowed much more than expected in July as strong Latin American demand helped push exports to a new record and imports fell slightly, a government report showed on Thursday.
The trade gap totaled $44.8 billion, 13.1 percent less than in June and well below a consensus forecast of $51.0 billion from Wall Street analysts surveyed before the report. It was the biggest month-to-month percentage drop in the deficit since February 2009.
U.S. exports rose 3.6 percent to a record $178.0 billion, driven by record shipments to countries in South and Central America and higher demand from China and major oil producers. Records were also set for two large categories, goods and services, as well as for capital goods and autos.
The buoyant export numbers are good news for President Barack Obama, who has set a goal of doubling exports by 2014 to help create jobs. On Thursday night, he will make a speech outlining additional ideas for reducing high U.S. unemployment.
However, exports declined in July to Japan, which is still recovering from a massive earthquake and tsunami disaster earlier this year, and also to the European Union, which has been rattled by debt crises in a number of member states.
U.S. imports slipped 0.2 percent in July to $222.8 billion, as the average price for imported oil declined for a second consecutive month to $104.27 per barrel and the volume of crude oil imports also fell.
However, imports from China rose 2.1 percent to $35.1 billion and helped swell the bilateral trade gap with that country to $27.0 billion, the highest in 10 months.
Capital goods imports were the highest on record and auto imports were the highest since February 2008, before the global financial crisis caused U.S. demand to plummet.
(Reporting by Doug Palmer, Editing by Chizu Nomiyama)