WASHINGTON The U.S. trade deficit narrowed in June as imports dropped to the lowest level in more than 1-1/2 years, potentially signaling slowing domestic demand.

The trade deficit contracted 4.1% to $65.5 billion, the Commerce Department said on Tuesday. Data for May was revised to show the trade gap narrowing to $68.3 billion instead of $69.0 billion as previously reported. Economists polled by Reuters had forecast the trade deficit shrinking to $65 billion.

Trade was a small drag on gross domestic product in the second quarter after contributing to growth for four straight quarters. The economy grew at a 2.4% annualized rate in the April-June quarter.

Imports of goods and services declined 1.0% to $313.0 billion, the lowest level since November 2021. Goods imports tumbled 1.2% to $253.3 billion, the lowest level since October 2021. Exports dipped 0.1% to $247.5 billion. Goods exports also slipped 0.1% to $165.1 billion.

(Reporting by Lucia Mutikani, Editing by William Maclean)