The U.S. trade gap widened in June to its largest since October 2008, as both U.S. imports and exports declined in a sign of slowing global demand, a government report showed.
The June trade deficit leapt to $53.1 billion, surprising analysts who expected it to narrow to $48 billion from an upwardly revised estimate of $50.8 billion in May.
Overall U.S. imports fell by close to 1 percent, despite a rise in the value of crude oil imports to the highest since August 2008. Higher volume pushed the oil import bill higher, as the average price for imported oil fell to $106 per barrel after rising in each of the eight prior months.
Industrial supplies and materials led the overall import decline, despite the higher value of crude oil imports. June imports of foods, feeds and beverages increased slightly to $9.2 billion, a new record.
Imports from China also rose nearly 5 percent to $34.4 billion, pushing the closely-watched trade gap with that country to $26.7 billion, the highest in 10 months.
U.S. exports fell for a second consecutive month to $170.9 billion, as shipments to Canada, Mexico, Brazil, Central America, France, China and Japan all declined.
However, exports to the entire 27-member European Union rose fractionally higher to $22.7 billion, despite the debt crisis troubling the continent.
President Barack Obama has set a goal of doubling U.S. exports by end of 2014 to help pull the U.S. economy out of its slump and generate new jobs.
The two-month export decline does not necessarily endanger that goal, but it could increase pressure on the White House and Congress to pass long-delayed trade deals with South Korea, Colombia and Panama.
Industrial supplies and materials also led the export decline, while consumer goods exports edged slightly higher to set a new monthly record of $15 billion. (Reuters)