Friday, March 27th8.4°C
24867
23613

US trade deficit shrinks to 5-month low in June as imports drop sharply, exports tick up

WASHINGTON - The U.S. trade deficit fell in June to its lowest level since January as imports dropped sharply, led by lower shipments of cellphones, petroleum, and cars.

The trade deficit fell 7 per cent in June to a seasonally adjusted $41.5 billion, from $44.7 billion in May, the Commerce Department said Wednesday.

Exports rose 0.1 per cent to $195.9 billion, a record high. Imports fell 1.2 per cent, the most in a year, to $237.4 billion.

Imports of petroleum products fell, cutting the trade deficit in petroleum to its lowest in four years.

The unexpected decline suggests that growth may have been stronger in the second quarter than the government initially estimated. A lower trade deficit can boost economic growth when it shows Americans are buying more U.S. products and fewer overseas goods.

The economy grew at a 4 per cent annual rate in the April-June quarter, the government said last week. But that figure included an estimate of the June trade deficit that was higher than Wednesday's figure.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note to clients that the deficit figures indicate growth may have been as high as 4.3 per cent in the second quarter. The government will revise its figure for the April-June quarter later this month.

Imports surged in the first four months of this year, pushing the trade deficit to a two-year high in April. A slowdown in imports was likely after the surge, economists said.

June's decline comes after the trade deficit was a huge drag on the economy earlier this year, slowing growth by 1.7 percentage points in the first quarter. The economy shrank at a 2.1 per cent seasonally adjusted annual rate in that quarter, the worst showing since the recession.

But the government estimates that the trade gap was a much smaller drag in the second quarter, subtracting 0.6 percentage points from growth.

The trade deficit has widened in the first six months of this year to $260 billion, up from $242.7 billion in the first half of 2013. While exports have increased, imports have risen even more. But higher imports suggest that consumers and businesses are spending more.

In 2013, the trade deficit declined by 11.4 per cent. That reflected in part a boom in U.S. energy production that cut into America's dependence on foreign oil, while boosting U.S. petroleum exports to a record high.

The nation's trade balance in oil has continued to improve this year. The U.S. had a petroleum trade deficit of $105.3 billion in the first half of this year, down from $125.7 billion last year.

The U.S. deficit with the 28-nation European Union narrowed 9 per cent in June from May to $11.2 billion, as exports to the region rose and imports fell. The gap with China, however, increased 4.5 per cent to $30.1 billion, as exports rose but imports increased by much more.

The Canadian Press


Read more Business News

24910


Recent Trending




Today's Market
S&P TSX14796.46-73.34
S&P CDNX679.29-0.27
DJIA17683.74+5.51
Nasdaq4877.37+14.01
S&P 5002058.26+2.11
CDN Dollar0.7955-0.0054
Gold1196.30-8.80
Oil49.91-1.52
Lumber281.60-4.40
Natural Gas2.613-0.059

 
Okanagan Companies
Pacific Safety0.125-0.005
Knighthawk0.010.00
QHR Technologies Inc1.49-0.01
Cantex0.03-0.01
Anavex Life Sciences0.22+0.01
Metalex Ventures0.04-0.01
Russel Metals24.58-0.10
Copper Mountain Mining1.11-0.02
Colorado Resources0.11-0.01
ReliaBrand Inc0.006-0.001
Sunrise Resources Ltd0.045+0.000
Mission Ready Services0.27+0.04
Decisive Dividend Corporation2.10+0.32

 





FEATURED Property
2238778#409 2435 Pleasant Valley Road
1 bedrooms 1 baths
$99,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


CRA Notice of Assessment

Many Canadians rush to file their taxes on time each year and don’t think about it until the next year. One of the most overlooked notices received from the CRA annually is the annual Notice of ...


Medical confidential?

If ICBC asks your doctor for your information you may wonder: Can ICBC ask my doctor for my medical information? Can ICBC request a medical report from my doctor without my consent? What is ICBC entit...


Stay out of sales limbo!

Have you ever had a series of good meetings with a prospect … gathered all kinds of information … and given what you thought was a great presentation … only to receive a response ...

_








Member of BC Press Council


24920