July trade deficit narrows to $40.5 billion

The U.S. trade deficit narrowed in July to $40.5 billion, down $300 million from June, to its lowest level since January, the Commerce Department said Thursday.

Growth in exports outpaced that of imports in July, producing a narrower deficit than the $42.2 billion that economists had forecast.

Total exports of goods and services were $198 billion in July while imports totaled $238.6 billion, the Commerce Department said Thursday.

The U.S. increased its exports of automotive vehicles, parts and engines and industrial materials and capital goods compared with June. But the automotive category was also a leading source of increased imports. Other categories showing import gains included industrial supplies and materials and food, feed and beverages.

From July 2013 to July 2014, the U.S. trade deficit in goods and services has increased $1.1 billion. Exports were up $8.1 billion, or 4.3%, and imports were up $9.2 billion, or 4.0%.