WASHINGTON: The US trade deficit widened slightly in June due to surging oil prices, government data showed Wednesday in a report suggesting the global recession may be bottoming out.
The Commerce Department reported the US trade deficit grew to $27.0 billion from a revised $26.0 billion in May.
The June deficit was less than the $28.5 billion expected by most analysts but showed gains in both imports and exports, suggesting trade flows are picking up after steep declines.
“Trade is still a long way from being normal. But the normalizing trends are in place,” said Robert Brusca of FAO Economics.
Joel Naroff of Naroff Economic Advisors said the deteriorating trade situation “should actually be cheered.” “It means the US economy is growing again and we are sucking in products from all across the globe,” he said.
A sharp rise in crude oil prices accounted for much of the headline increase and the politically sensitive deficit with China also rose. Excluding oil products, the Commerce Department noted the US trade deficit was its weakest since January 1999, at $20.0 billion, and 11.7 percent below the May level. “At the current rate of improvement, non-oil trade will be in surplus by the end of this year,” said Ian Shepherdson of High Frequency Economics.
The June trade deficit was 55 percent below the level of a year ago. The Commerce Department said that adjusted for inflation, the deficit was the smallest since December 1999. Trade volume jumped 2.2 percent in June after a weak 0.4 percent rise in May amid signs the global economy may be fighting its way out of the deepest recession since World War II.
