WASHINGTON, Aug 14: The US trade deficit unexpectedly narrowed in June as a weaker dollar and overseas growth boosted exports to a record, offsetting record imports lifted by higher oil prices and strong capital goods imports, a government report showed on Tuesday.

The June trade gap totalled $58.1 billion, down 1.7 per cent from a downwardly revised May deficit of $59.2 billion, originally reported as $60 billion. The June deficit was the smallest since February’s $57.6 billion gap and was below the median forecast of $61 billion from Wall Street analysts polled by Reuters, according to the Commerce Department data.

Overall goods and services exports rose 1.5 percent from May to a record $134.5 billion, led by a $1.2 billion increase in industrial supplies and materials and record exports of vehicles, auto parts and engines and of foods, feeds and beverages.

Rising US exports are contributing to a narrowing of the trade gap on an annual basis and are helping to underpin domestic growth in the face of a steep housing downturn and credit market turmoil.

Markets mostly shrugged off the trade data, focusing instead on separate data showing a bigger-than-expected 0.6 per cent rise in US producer prices in July.

The dollar remained steady, while US Treasury debt prices edged lower and stock index futures were also off slightly.

US imports rose 0.5 per cent to $192.7 billion as the US oil import bill edged higher to $19.6 billion and imports of capital goods such as computers hit a new record.The average price for crude oil rose $1.59 a barrel to $60.95, the highest since $62.40 in September 2006. Imports from the Organisation of Petroleum Exporting countries, however, decreased 4.6 per cent to $13.9 billion.

The closely watched US trade deficit with China widened 5.7 per cent in June to $21.2 billion, despite record exports of $5.9 billion to China. Imports from China rose 6.8 per cent or $1.7 billion to $27.1 billion, the highest since November 2006.

China last week reported that its own global trade surplus edged lower in July to $24.36 billion from a record $26.91 billion in June as rebates of value added taxes were eliminated on July 1 for 2,800 export product lines.—Reuters