The United States trade deficit unexpectedly narrowed in June as the biggest jump in exports in more than four years overcame record imports of petroleum.
The gap shrank 4.1 percent to US$56.8 billion from a revised US$59.2 billion in May that was smaller than previously estimated, the Commerce Department said yesterday in Washington.
The increase in demand from overseas signals that manufacturers like Caterpillar Inc may be better able to withstand a slump in US sales and an increase in oil prices. Slowing demand for imported goods excluding petroleum means trade will keep helping the economy after making its biggest contribution to growth in 28 years last quarter.
"This is decidedly good news for the US economy," said David Resler, chief US economist at Nomura Securities International Inc in New York, in an interview with Bloomberg Radio. "It shows that the US economy is still deriving considerable strength from foreign trade," with gross domestic product in the second quarter probably growing "well north of 2 percent."
Economists had forecast the gap would widen to US$62 billion from an initially reported US$59.8 billion in May, according to the median of 71 estimates in a Bloomberg News survey. Projections of the deficit ranged from US$58 billion to US$65.7 billion.
A weaker dollar has helped stoke American exports. The currency has slumped 24 percent versus the euro in the past five years. The dollar has recouped some losses in the past four weeks as the outlook for Europe's economy dimmed. It was little changed after yesterday's figures, at US$1.4941 at 8:40am in New York.
Exports increased 4 percent, the biggest percentage jump since February 2004, to US$164.4 billion, led by record overseas sales of food, industrial supplies, capital goods and consumer goods.
Imports rose 1.8 percent to US$221.2 billion after increasing 0.3 percent in May. The import figures reflected a record US$44.5 billion in purchases of foreign petroleum as well as record purchases of industrial supplies from overseas and increased demand for foreign-made autos and parts.
A barrel of imported crude oil cost US$117.13 in June, up from US$106.28 the previous month.
After eliminating the influence of price changes, the trade deficit narrowed to US$39.1 billion, the lowest since December 2001, from US$43.5 billion in May.
Those are the numbers used to calculate gross domestic product and may prompt economists and the government to increase their estimates of second-quarter growth.
