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U.S. Trade Deficit Widens In May

U.S. Trade Deficit Widens In May

The US trade deficit widened more than expected in May, rising oil prices have contributed to higher import bills and exports remained limited by the continuing effects of a strong dollar

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the Commerce Department said Wednesday the trade deficit increased 10.1 percent to $ 41.1 billion. The trade deficit in April was unrevised at $ 37.4 billion. Economists polled by Reuters had forecast the increase in the trade deficit to $ 40.0 billion in May. After adjusting for inflation, the deficit rose to $ 61.1 billion from $ 57.5 billion in April.

Despite the increase, the trade deficit corrected for inflation in April and May remained below the average for the first quarter, suggesting that trade is on track to make a modest contribution to gross domestic product in the April-June period.

Federal Reserve of Atlanta currently expected second quarter GDP increased at an annualized rate of 2.6 percent. The economy grew at 1.1 percent pace in the first quarter.

export growth strong rise in the dollar against the currencies of major trading partners of the United States between June 2014 and December 2015 have inferior.

With the weakening of the dollar this year on a trade-weighted basis, some of the drag on exports had begun to disappear. An Institute for Supply Management survey Friday showed manufacturers reported an increase in new export orders in May for four consecutive months.

But the dollar has regained strength in the wake of the British referendum last month to leave the European Union and economists say it could renew pressure on exports.

In May, exports of goods fell by 0.2 percent to $ 119.8billion. Total exports of goods and services dipped 0.2 percent to $ 182.4 billion. Exports of capital goods, autos and consumer goods declined.

But industrial supplies and food increased in May.

Exports to the European Union fell 4.2 percent, exports to the United Kingdom plummeting 15.6 percent. Goods shipped to Canada and Mexico, the main trading partners of the United States, also declined in May. China also bought fewer US products made in May, exports to that country fell 1.7 percent.

Imports of goods increased by 1.9 percent to $ 182.1 billion in May, oil prices represents a portion of the increase. average oil prices $ 34.19 per barrel in May, the highest since December, compared with $ 29.48 in April.

$ 4.71 The increase in average oil prices in May from April was the biggest in five years. Despite the increase in oil prices, the commercial oil deficit was the lowest since February 1999, the country less dependent on foreign oil.

The increase in imports in May also suggested a pickup in domestic demand. Imports of industrial supplies, automobiles and consumer goods increased in May. Food imports have also increased.

Imports from China jumped 13.8 percent while imports of mobile phones have increased. With a drop in exports, the trade deficit of the United States-China politically sensitive jumped 19.4 percent to $ 29.0 billion in May.

Forex heatmap

Reuters


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