Export Surge Causes a Drop in the June Trade Deficit

The US trade deficit shrank in June as exports surged to a record high $191 billion, while imports shrank by almost $6 billion to $225 billion. According to figures released yesterday by the Department of Commerce, the trade deficit for the month reached $34.2 billion, or almost 23 percent lower compared to the $44.1 billion in May, which recorded the lowest trade deficit since October 2009.

The May to June increase in exports reflected an increase in industrial supplies and materials of $1.5 billion; capital goods, $1.5 billion; consumer goods, $1 billion; food products, animal feed, and beverages, $0.3 billion; and other goods $0.3 billion. Leading the export list were aircraft engines,  telecommunications equipment, heavy machinery and farm goods with US made automotive vehicles, parts and engines seeing a decrease of $0.4 billion in the overseas sales during the month.
On the imports side, the 2.5 percent May to June decrease in imports of goods reflected decreases in industrial supplies and materials, $2.5 billion; consumer goods, $1.6 billion; ‘other goods,’ $1.2 billion; food products, animal feed, and beverages, $0.4 billion; and automotive vehicles, parts, and engines $0.3 billion. The volume of capital goods imports was virtually unchanged, while oil imports declined to their lowest level in more than two years.
US service exports in June increased $0.1 billion from the previous month. The increase was mostly accounted for by an increase in travel and tourism, $0.1 billion. Grow in other service categories such as consulting, architectural and engineering, legal, and financial were relatively small. Service imports were virtually unchanged from May to June. A $0.1 billion decrease in the ‘other transportation’ sector, which includes freight and port services, was mostly offset by increases of less than $0.1 billion in several other categories.
The June trade figures show surpluses with Hong Kong, Australia, Brazil and Singapore, with deficits recorded with China, the European Union, Japan, Germany, Mexico, Saudi Arabia, Korea, Canada, Ireland, Venezuela and India.

US Trade Gap Widens as Exports Slip

July 3, 2013

The U.S. trade deficit widened to $45 billion in May, up 12.1 percent from April and its highest level since November as a sluggish global economy depressed U.S. exports.

Exports slipped 0.3 percent to $187.1 billion. Sales of American farm products dropped to their lowest point in over two years. Imports rose 1.9 percent to $232.1 billion. Imports of autos and nonpetroleum products hit an all-time high.

As U.S. Trade Deficit Grows, Some Growth Forecasts Drop

By THE ASSOCIATED PRESS

Published: July 3, 2013

WASHINGTON — The United States trade deficit widened in May to its highest level in six months as a sluggish global economy depressed demand for American exports. Fewer exports mean growth in the April-June quarter could be weaker than previously forecast. The trade deficit rose to $45 billion in May, up 12.1 percent from $40.1 billion in April, the Commerce Department said on Wednesday. It was the largest trade gap since November.

Exports slipped 0.3 percent to $187.1 billion. Sales of American farm products dropped to their lowest point in more than two years. American exports have been hurt by recessions in many European countries. Imports rose 1.9 percent to $232.1 billion. Imports of autos and other nonpetroleum products rose widely. The trade deficit is running at an annual rate of $501.2 billion, 6.3 percent lower than last year’s deficit.

Paul Dales, senior United States economist at Capital Economics, said the larger trade deficit for May indicated that economic growth in the second quarter could be even weaker than the sluggish 1.5 percent annual rate that he had forecast. Economists at Barclays said the higher deficit led them to downgrade their growth forecast for the second quarter to 1 percent, from 1.6 percent.

The American economy expanded at an annual rate of only 1.8 percent in the first three months of the year. For May, exports to the European Union (link is external) were up 6.4 percent. But over the last five months, exports to this region have declined 6.3 percent from the same period in 2012. Europe has been hurt by a prolonged debt crisis (link is external), which has led to recessions across the Continent. The United States trade deficit with China (link is external) jumped 15.6 percent to $27.9 billion in May. That is close to the monthly high set in November. So far this year, the trade deficit with China, the largest with any country, is running 3 percent higher than last year.