Trade deficit widens in July; capital goods imports hit record high

The U.S. trade deficit widened sharply in July, underscoring how import growth is continuing to weigh on the economy’s third-quarter momentum. The shortfall rose 24.4% to $88.6 billion, according to data from the Bureau of Economic Analysis and the Census Bureau. Economists surveyed by Reuters expected a deficit of $90.0 billion. Imports climbed 2.8% to $399.3 billion, including a 3.7% jump in goods imports to $320.6 billion. Capital goods imports surged $14.4 billion to a record $140.3 billion, driven by computers, related accessories and semiconductors tied to AI investment. Exports fell 2.1% to $310.7 billion.