U.S. Trade Deficit Climbs to Record Level

August 5, 2021

The U.S. trade deficit widened to a new record in June, as the economic rebound fuelled strong consumer demand for foreign goods.

The trade gap for goods and services grew by 6.7% from the month before, widening to a seasonally adjusted total of $75.7 billion, according to the Commerce Department. In the years prior to the pandemic, the trade deficit typically hovered between $40 billion and $50 billion.

Much of the gap was driven by strong demand for overseas purchases among U.S. consumers. Purchases of goods from overseas increased by 2.1% for the month, climbing to $283.4 billion, a new monthly record.

While consumer demand was quick to snap back in the U.S., foreign damnd for U.S.-made goods has been slower to recover as many regions where vaccination rates lag and Covid outbreaks remain. Exports from the U.S. increased by just 0.6% in June to a total of $207.7 billion.

This data comes from June, prior to the spread of the Delta variant in the U.S., and some economists argue that the virus’s resurgence, coupled with ongoing supply chain disruptions and labor shortages, could hinder economic growth, reducing consumer demand.

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