US imports jumped nearly 11 percent in July, driving the trade gap up to $63.6 billion in the month, the Commerce Department reported Thursday, far more than economists had expected.
Although American exports also rose in July, it was far less than imports, contributing to the $10.1 billion jump in the overall deficit -- nearly 19 percent higher than June, according to the report.
Though trade has picked up pace it "remained below pre-pandemic levels, reflecting the ongoing impact of COVID-19, as many businesses continued to operate at limited capacity or ceased operations completely, and the movement of travelers across borders remained restricted," the Commerce Department said in the report.
However, the report said it could not quantify or separate the impact of the pandemic on the trade data.
"A strong and sustained rebound in trade flows is uncertain given a still weak global growth and demand backdrop," said Rubeela Farooqi of High Frequency Economics.
Jim Watson of Oxford Economics was more stark, saying that "with the domestic and global recoveries looking vulnerable, we think trade will struggle to keep its strong pace. Downside risks are clear, and we expect total trade volumes to fall a record 14 percent in 2020."
Big increases were seen in imports of vehicles, parts and engines, industrial supplies and consumer goods in July. Petroleum imports also surged by $21.5 billion.
The trade deficits in goods alone increased sharply with China and Mexico, to $28.3 billion and $11.5 billion respectively.
With trade in services included, the deficit with China in the second quarter -- the latest period for which data is available -- surged to $75.8 billion, while the gap with Mexico jumped to $15 billion, the report said.
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