US Trade Gap Widens 7 Percent in June as Imports Jump
The U.S. trade deficit increased in June as solid consumer spending pulled in more imports, while the strong dollar restrained exports. The Commerce Department said Wednesday the trade gap jumped 7 percent to $43.8 billion in June, up from $40.9 billion in May. Imports increased 1.2 percent to $232.4 billion, while exports edged lower to $188.6 billion from $188.7 billion. U.S. manufacturers have been held back this year by the strong dollar, which makes their products more expensive overseas. Exports of large capital equipment, including telecommunications gear and industrial machinery, fell 1.7 percent in June. Imports of food, auto parts, and consumer goods such as pharmaceuticals and cellphones surged as Americans spent more. Even so, the deficit narrowed in the second quarter compared with the first, boosting the economy. Trade has been volatile this year. Labor disputes at West Coast ports in the first quarter delayed imports and the shipment of U.S. goods overseas. That lowered exports and pushed the deficit to a three-year high in March of $50.6 billion. “The current level of … goods exports remains far below trend and we have yet to see a decisive rebound following the resolution of the West coast port strike,” said Laura Rosner, an economist at French bank BNP Paribas. International trade subtracted about 2 percentage points from growth in the January-March quarter, when the economy expanded at an anemic annual rate of just 0.6 percent. It then added 0.1 percentage point in the April-June quarter, when growth picked up to a 2.3 percent pace. The dollar has risen about 14 percent in value against overseas currencies in the past year. That also makes foreign products cheaper in the U.S.To read the full article, please click here