The US trade deficit fell in July for the first time in three months, the Commerce Department said Thursday, as the vaccine-fueled surge in American consumer demand ebbed and exports picked up.

The trade deficit was $70.1 billion in July, according to the report, 4.3 percent lower than the previous month's downwardly revised figure and a bigger drop than analysts expected.

Imports fell very slightly to $282.9 billion, while exports picked up 1.3 percent to $212.8 billion, in what Mahir Rasheed of Oxford Economics described as trade flows reverting after the United States' vaccine-fueled spring bounceback.

"We expect the deficit to narrow further as foreign consumption gains momentum and domestic demand decelerates," he said in an analysis.

"The pandemic will continue to pose a downside risk to trade flows, but we expect a gradual normalization in trade dynamics as vaccinations increase and supply disruptions slowly ease."

The decline in the overall goods and services deficit was fueled by a drop of $5.5 billion in the goods deficit to $87.7 billion, while the services surplus fell $2.4 billion to $17.7 billion.

Compared to July 2020, when the pandemic had badly hit global commerce and American consumer demand, the deficit was 37.1 percent, or $131 billion, higher.

Services exports increased marginally while goods exports made up the bulk of the overall jump, with capital goods seeing a $1 billion increase, while consumer goods and automobiles and parts rose by smaller amounts.

Goods made up most of the decline in imports, with consumer goods falling $2.1 billion and industrial supplies dropping $1.7 billion even as cars and parts rose $1.1 billion.

However services imports increased by $2.4 billion, with travel rising $1 billion and intellectual property charges, which included rights to broadcast the 2020 Summer Olympic Games, gaining $0.9 billion.