US goods trade deficit narrows to $101.5B in June, but net exports still dragging on Q2 GDP

The US goods trade deficit came in at $101.5 billion for June 2026, a 4.2% improvement from May’s $105.9 billion figure. Economists are projecting that net exports will subtract roughly 1 percentage point from second-quarter GDP growth ahead of the advance GDP release scheduled for July 30. The Atlanta Fed’s GDPNow model had pegged the impact even higher, estimating a 1.35 percentage point reduction from net exports just before the GDP print. What the numbers actually show According to preliminary data from the US Census Bureau released on July 28, imports declined 2.6% in June while exports fell 1.8%. Both sides of the ledger moved lower, but imports dropped faster, which is how the deficit managed to narrow. Capital goods were a key driver of the declines on both sides. That category includes things like industrial machinery, semiconductors, and telecommunications equipment. The prior month tells an even more interesting story. May’s goods and services deficit had ballooned to $77.6 billion, marking the largest monthly shortfall since March 2025. So June’s improvement needs to be viewed in the context of a snapback from an unusually wide gap, not a fundamental trend reversal. The...