The US trade deficit narrowed in June on a bigger pullback in imports than exports.

According to government data released on Tuesday, the overall trade gap came in at $65.5B in June, down from a revised $68.3B figure in May.

While stronger-than-expected consumer spending has helped to boost US trade, analysts have noted that this could weaken going forward.

"Overall, trade flows continued to slow in the second quarter, both imports and exports," says economist Rubeela Farooqi of High Frequency Economics.

"A weaker trend could persist owing to the effects of monetary policy tightening globally, which is likely to slow demand and economic activity domestically and abroad," she added.

To curb escalating inflation, central banks, including the US Federal Reserve, have been swiftly increasing interest rates to suppress consumer demand.

Commerce Department data revealed that imports of various goods, including computers and industrial supplies, experienced a decline in June.

The trade deficit in goods with China decreased to $22.8B due to a larger decrease in imports compared to exports.

"Net trade was a huge swing factor in GDP growth last year, but we see few signs of another blowout in the trade deficit this year," says economists Ian Shepherdson and Kieran Clancy of Pantheon Macroeconomics in a recent report.

Since the Covid-19 outbreak, trade has played a pivotal role. In 2022, the US trade deficit reached a new high due to a significant increase in imports of goods, including crude oil and consumer items like pharmaceuticals and household products.