The Commerce Department reported Wednesday the US trade deficit shrank from a seasonally adjusted $2.28 billion in June to $1.85 billion in July. It was the 50th consecutive month the United States has imported more than it has exported, but he smallest trade gap since March 1979.
A drastic drop in petroleum imports -- brought on by the recession, driver conservation, and an apparent inventory adjustment by oil companies -- overshadowed a slight increase in other imports and accounted for the improvement. Foreign petroleum imports fell from an average of 7.1 million barrels a day in June to 5.6 million barrels a day in July -- the least amount of foreign oil the US has imported since May 1976.
Despite the improvement in last month's trade figures, the government still projects a deficit of about $40 billion or more for the year.