The US trade deficit widened more than expected in June as stronger domestic demand in the second quarter and a higher dollar boosted food and car imports.
The Commerce Department said the deficit rose 7.1 percent to $43.8 billion, also reflecting a second consecutive monthly decline in exports. It revised May’s deficit to $40.9 billion from the previously reported $41.9 billion.
Analysts had expected a deficit of $42.8 billion. Adjusted for inflation, it rose to $59.3 billion in June from $57.6 billion the month before. Exports fell 0.1 percent to $188.6 billion, which the department linked to a stronger dollar and stagnant global demand. Imports increased 1.2 percent to $232.4 billion.
Private-sector job growth slowed sharply in July, suggesting that economic momentum had eased at the start of the third quarter and potentially restraining expectations of a September rate increase.
The ADP employment report said private employers hired 185,000 workers the previous month, below economists’ expectations of 215,000. June’s increase was revised down to 229,000 from 237,000.
The report, prepared with Moody’s Analytics, came ahead of the government’s broader employment report due Friday. A Reuters poll of economists expected an increase of 223,000 jobs, matching June’s gain.
By contrast, service-sector activity accelerated to its highest level in nearly ten years, strengthening the likelihood of an interest-rate increase that year.
The Institute for Supply Management said its services index jumped to 60.3 the previous month, the highest reading since August 2005, from 56 in June.
The index was supported by a 5.5 percent increase in new orders, also reaching their highest level since August 2005. A service-sector employment index jumped 6.9 percent to a ten-year high. Fifteen service industries grew during the month, while output contracted in two, including mining.