The US trade deficit fell in July to the lowest level in five months, the Commerce Department reported today (September 3rd).
The deficit was down to $41.9 billion (£2.7 billion) in July, a 7.4 per cent decline from June ($45.2 billion). Economists surveyed by Reuters had forecast the trade gap to shrink to $42.4 billion.
Exports edged up 0.4 per cent to $188.5 billion, helped by stronger sales of US cars and machinery. Meanwhile, imports declined 1.1 per cent to $230.4 billion.
So far this year, the deficit is running 3.6 per cent above last year's level and economists are concerned that US growth could be hurt by future declines in exports due to a sluggish growth overseas and a strong dollar. The greenback gained 16.8 per cent against the currencies of the US's main trading partners since June 2014.
IMF issues warning on global growth
The International Monetary Fund (IMF) has issued a warning, saying on Tuesday (September 1st) that global economic growth is likely to be weaker than expected.
In July this year, it cut its global growth forecast to 3.3 per cent in 2015, down from a 3.5 per cent initial forecast made in April.
The IMF said this is due to a slower recovery in advanced economies and a further slowdown in emerging nations.
"Overall, we expect global growth to remain moderate and likely weaker than we anticipated last July. This reflects two forces: a weaker than expected recovery in advanced economies, and a further slowdown in emerging economies, especially in Latin America," IMF managing director Christine Lagarde said in a speech at the University of Indonesia in Jakarta.
"Asia as a region is still expected to lead global growth. But even here, the pace is turning out slower than expected – with the risk that it may slow even further given the recent spike in global risk aversion and financial market volatility," she added.
But despite sluggish overseas growth, the US economy remains resilient, growing at an annual rate of 3.7 per cent in the second quarter of the year.