Trade deficit widens sharply as imports rise

WASHINGTON Wed Jul 3, 2013 8:35am EDT

A cargo ship sits at the dock at a port of Miami, October 4, 2007. REUTERS/Carlos Barria

A cargo ship sits at the dock at a port of Miami, October 4, 2007.

Credit: Reuters/Carlos Barria

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WASHINGTON (Reuters) - The trade deficit widened sharply in May, as stronger U.S. demand pulled in more imports from China and the rest of the world and sluggish growth abroad pushed exports lower, a U.S. government reported showed on Wednesday.

The trade gap swelled more than 12 percent to $45.0 billion from a revised $40.1 billion in April, the biggest month-to-month increase in two years, the Commerce Department said.

Analysts surveyed before the report had expected the May deficit to narrow slightly to $40.1 billion, from the previously reported April figure of $40.3 billion.

The widening of the trade gap could prompt analysts to lower their estimates of second-quarter U.S. growth.

Imports rose 1.9 percent to $232.1 billion, the highest since the record level of $234.3 billion set in March 2012.

May imports, when adjusted for inflation, were a record $167.2 billion, the department said.

Imports from China jumped 10.7 percent to $36.6 billion, on a non-seasonally adjusted basis.

In other signs of stronger U.S. demand, imports of services, autos and auto parts, and food, feeds and beverages also hit record highs, as did total non-petroleum imports.

The U.S. non-petroleum deficit swelled to $41.6 billion, the highest since September 2007.

U.S. exports fell 0.3 percent to $187.1 billion, with increases in categories such as autos and auto parts and capital goods more than offset by a decline in consumer goods, food, feeds and beverages and industrial materials .

The slight decline reflects sluggish growth in the rest of world, particularly in major trading partners like China.

But there were a few bright spots on the export side, with shipments to Canada hitting a record high.

U.S. auto and auto part exports also hit a record high and total U.S. exports were only slightly below the record high of $188.7 billion set in December.

(Reporting by Doug Palmer, Editing by Andrea Ricci)

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Comments (1)
MikeBarnett wrote:
Few people want to buy US products because the NSA may have backdoors in them that will let them spy on purchasers. It is better to buy products from China than to buy anything from the USA. That caused imports from China to rise 10.7%, and the drop in US exports comes from the distrust of everything made in the USA.

Jul 03, 2013 6:41pm EDT  --  Report as abuse
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