WASHINGTON, July 12: The US trade deficit rose in May to $60 billion as Americans imported more oil and other goods, especially from China and other Asian economies, the Commerce Department said on Thursday.
The May reading marked a 2.3 per cent increase from a $58.7bn shortfall in the prior month, in line with economists’ consensus forecast.
The April shortfall was revised slightly lower from an initial estimate of $58.5 billion, mostly on lower imports.
Imports in May reached a record $192 billion, while exports also set a record at $132 billion, the Commerce Department said.
The trade in goods deficit stood at $69 billion, while trade in services had a surplus of $9 billion.
The Commerce Department said imports rose 2.3 per cent or $4.2 billion. More than half of the dollar increase was in energy and metals products.
Petroleum imports rose 6.0 per cent by volume and the average price per barrel of crude, at $59.36, was the highest since $62.40 last September.
Exports in May were up 2.2 per cent or $2.9 billion, mostly from higher capital goods exports, including aircraft, electronics and machinery.
Because the higher trade gap was due in large part to higher oil prices, analysts said the figures suggest the trade picture may help US economic output.
Robert Brusca at FAO Economics said “exports are finally showing some thrust over three months and capital goods exports, the category of US traditional export strength, are strong.”
The trade gap with China, the engine of cheap consumer goods, climbed to $20 billion in May, a gain of 3.3pc from April, according to data unadjusted for seasonal variations.
Adjusted to take account of the dollar’s exchange rate, however, the gap narrowed by 0.6pc.
Imports from China climbed 4.6pc to $25.3 billion and exports rose 9.8 per cent to $5.3 billion.
Since January, the US trade gap with China has risen to $96.3 billion, compared with $82.2 billion in the same period a year ago, a 17.2 per cent increase that when dollar-adjusted represents a decline of 14.1 per cent.
Democratic lawmakers are pressing Republican President George W. Bush to take steps to stem the rising tide of Chinese imports. They argue the Chinese government is keeping its yuan currency undervalued against the dollar, making Chinese imports unfairly cheaper and keeping US imports more expensive in China.
“Trade with China contributes nearly as much to the trade deficit as petroleum, making the yuan-dollar exchange rate as important as the price of oil for the size of the trade deficit and the outlook for US GDP and jobs growth,” said Peter Morici, a business professor at the University of Maryland.
“Lost growth is cumulative ... The damage grows larger each month, as the Bush administration dallies and ignores the corrosive consequences of the trade deficit,” Morici said.
By contrast, the gap with Japan narrowed to a three-year low of $5.9 billion.
With the other Asian “tiger” economies -- Hong Kong, South Korea, Singapore and Taiwan -- the US trade deficit soared 254 per cent to $1.3 billion.
US exports to the European Union were up 4.5pc or $900 million in May, shrinking the trade deficit with the 27-nation bloc 2.5pc to $8.8 billion.—AFP