WASHINGTON (Reuters) - The U.S. trade deficit in June was the smallest in 1-1/2 years as lower oil prices curbed imports, according to government data on Thursday that suggested an upward revision to second-quarter growth.
The shortfall on the trade balance narrowed 10.7 percent to $42.9 billion, the smallest since December 2010, the Commerce Department said. Economists polled by Reuters had expected the trade gap to narrow to $47.5 billion.
The petroleum import bill fell as the average price per barrel of crude oil dropped by the most since January 2009.
Overall imports of goods and services declined 1.5 percent to $227.9 billion. Exports increased 0.9 percent to a record $185.0 billion.
Trade subtracted almost a third of a percentage point from gross domestic product in the second quarter. The economy grew at a 1.5 percent annual rate, slowing from the first quarter’s 2.0 percent pace.
While exports showed strength in June, anecdotal evidence suggests a slowdown because of weak global demand. The Institute for Supply Management’s export index declined in July for a third straight month.
There also are concerns the worst drought since 1956, which has ravaged half of the country, could hit agricultural exports.
U.S. exports to the 27-nation European Union, in the grip of a continuing debt crisis that has slowed growth on the continent, increased 1.7 percent in June to $23.3 billion.
The EU collectively was the United States’ second largest export market last year, and exports in the first half of 2012 were 2.9 percent above the same period in 2011.
U.S. exports to China, which is also growing more slowly than in recent years, fell 4.3 percent in June.
China has been one of the fastest growing markets for U.S. goods, and exports to that country were up 6.7 percent for the first six months of 2012.
Reporting By Lucia Mutikani; Editing by Andrea Ricci