WASHINGTON, Aug 12: The US trade deficit shrank unexpectedly in June as a weak dollar stoked exports, offsetting record-high crude oil imports and a growing shortfall with China, official data showed on Tuesday.

The June trade deficit shrank a hefty 4.1 per cent to 56.8 billion dollars, the smallest gap since March, the Commerce Department said.

It was the second consecutive month the trade gap narrowed, and overturned market expectations it would swell to 61.9 billion dollars.

The Commerce Department revised lower the May trade deficit to 59.2 billion dollars from its initial estimate of 59.8 billion.

The weak dollar helped drive exports 4.0 percent higher to 164.4 billion dollars, while imports increased by a modest 1.8 per cent to 221.2 billion dollars as the world’s largest economy faced housing and financial headwinds.

“US growth is doing much better than domestic spending would indicate, both because exports are booming and because some of the weakness in domestic demand is being passed on to the rest of the world through lower imports,” said Nigel Gault, economist at Global Insight.

Crude oil and Chinese imports accounted for almost the entire June trade deficit.

At a record 117.13 dollars a barrel on average, the oil deficit hit 36.4 billion dollars, a record high that represented more than half the trade deficit.—AFP