WASHINGTON — The U.S. trade gap widened sharply in May to its highest level in 31 months as surging oil prices helped push imports to a near record and exports fell slightly from April’s record high.
The trade deficit totalled US$50.2 billion, the highest since October 2008, and well above the consensus estimate of US$44.0 billion from Wall Street analysts surveyed before the report, a Commerce Department report showed on Tuesday.
Imports rose 2.6% to US$225.1 billion, the highest since the record of US$231.6 billion set in July 2008 just before the global financial crisis took a huge toll on global trade.
U.S. stock index futures dipped slightly on the news, while the dollar pared gains against the euro. Bond prices were mostly unchanged.
The increase reflected record imports of capital goods and food, feeds and beverages in a sign of resurgent U.S. demand.
But a jump in oil import prices to US$108.70 per barrel — the highest since August 2008 — also accounted for a large part of the gain.
The oil price rise helped push the U.S. petroleum trade deficit to the highest since October 2008. Imports from the Organization of the Petroleum Exporting Countries were also the highest since October 2008.
The wider-than-expected trade gap could prompt analysts to scale back their estimates of second-quarter economic growth, as imports captured more of stronger U.S. demand.
But economists said trade will still add to growth in the second quarter.
“It won’t have prevented net external trade from making a decent positive contribution to second-quarter real GDP growth,” said Paul Dales, senior U.S. economist at Capital Economics in Toronto.
He said that without the contribution from trade, “the economy might have ground to a complete halt.”
Exports put in another strong showing, but slipped 0.5% from the April record to US$174.9 billion as shipments to the European Union, China and Newly Industrialized Countries all fell. Exports of capital goods were the highest on record.
President Barack Obama in 2010 set a goal of doubling exports in five years to help fuel economic growth and bring down the U.S. unemployment rate, which remains above 9%.
The politically sensitive trade gap with China jumped more than 15% to US$25 billion. U.S. companies imported US$32.8 billion of goods and services from the Asian powerhouse during May, but exported just US$7.8 billion worth to that country.
In worrisome sign for U.S. exports to China in June, recent data out of Beijing shows the country’s imports that month were the weakest in 20 months.
The wider trade gap with China could propel efforts in Congress to pass legislation aimed at pressuring Beijing to raise the value of its yuan currency, which critics charge is artificially weak against the dollar and gives Chinese exporters an unfair advantage.
Thomson Reuters 2011
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