Monday 23 October 2017

US trade deficit widens sharply as imports rise

THE U.S. trade deficit widened sharply in May, as stronger U.S. demand pulled in more imports from China and the rest of the world and sluggish growth abroad pushed exports lower, a U.S. government reported showed on Wednesday.

The trade gap swelled more than 12pc to $45bn from a revised $40.1bn in April, the biggest month-to-month increase in two years, the Commerce Department said.

Analysts surveyed before the report had expected the May deficit to narrow slightly to $40.1bn, from the previously reported April figure of $40.3bn.

The widening of the trade gap could prompt analysts to lower their estimates of second-quarter U.S. growth.

Imports rose 1.9pc to $232.1 billion, the highest since the record level of $234.3bn set in March 2012.

May imports, when adjusted for inflation, were a record $167.2bn, the department said.

Imports from China jumped 10.7pc to $36.6 billion, on a non-seasonally adjusted basis.

In other signs of stronger U.S. demand, imports of services, autos and auto parts, and food, feeds and beverages also hit record highs, as did total non-petroleum imports.

The U.S. non-petroleum deficit swelled to $41.6bn, the highest since September 2007.

U.S. exports fell 0.3pc to $187.1bn, with increases in categories such as autos and auto parts and capital goods more than offset by a decline in consumer goods, food, feeds and beverages and industrial materials .

The slight decline reflects sluggish growth in the rest of world, particularly in major trading partners like China.

But there were a few bright spots on the export side, with shipments to Canada hitting a record high.

 

Reuters

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