By Scott Kanowsky
Investing.com -- The U.S. trade deficit shrank by more than expected in June as strengthening international demand offset a domestic slump spurred on by soaring inflation and increasing borrowing costs.
Data from the Bureau of Economic Analysis on Thursday showed the trade deficit fell by 6.2% during the month to $79.6 billion, adding to the 1.3% decline seen in May. Economists had expected the trade balance in the world's largest economy to come in at $80.1 billion.
Goods and services exports rose 1.7%, touching a fresh record, while imports contracted by 0.3%.
Exports of goods, in particular, moved up by $3.5 billion, while services hit a new high. Goods imports fell $1.4 billion as services edged up slightly by $0.4 billion.
The latest data comes after the Federal Reserve increased its benchmark overnight interest rate by 75 basis points in two consecutive months in a bid to rein in soaring inflation. Fears have, in turn, risen that these hikes may weigh on growth.
The U.S. economy contracted in the second quarter, according to government data published last week, partly due to an upturn in exports that were offset by large declines in private inventory investment and state and local government spending.