Commerce Department Data Finds Deficit Lowering Thanks To Falling Oil Prices
On Thursday the Commerce Department announced that during Q2 2015, from April to June, the US trade deficit fell to $130 billion from $134.3 billion in Q1 2015, while the deficit for goods fell from $192.2 billion to $188.4 billion, and investment income surpluses rose from $49.7 billion to $50.6 billion. The deficit fell from 2.7% of GDP during Q1 2015 to 2.5%. Meanwhile, from Q1 to Q2, exports of goods and services rose to $564.7 billion from $561.7 billion, the AP reports. Additionally, the economy expanded in Q2 by a 3.7% annual rate. Trade deficit declines were led by falling oil prices, the AP says. Thursday’s news of overall Q2 trade deficit results comes after Reuters earlier this month noted that the trade deficit fell in July to its lowest level in five months due to rising US exports. For the month of July, the deficit declined to $56.2 billion from June’s monthly total of $59 billion. Whether or not these declines will continue throughout Q3 is uncertain.
What This Means For Small Businesses
Thursday’s Commerce Department data is mixed news for small businesses. On one hand, it indicates economic growth is continuing in the US. However, the AP cautions that the improvements might be short-lived because US exporters have seen overseas sales slump due to cooling economies in China and Europe, and a stronger US dollar makes US goods more costly to foreign markets. Thus, small businesses could see some difficulties in marketing their goods overseas.
Benzinga also noted the US Q2 trade deficit data as part of broader news about the US economy.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.