US trade deficit slips to 18-month low
Source: Agencies |
August 10, 2012, Friday
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THE US trade deficit fell to its lowest level in 18 months in June, pushed down by a steep drop in oil imports and a rise in exports.
The trade gap narrowed to US$42.9 billion in June, down from US$48 billion in May, the US Commerce Department said yesterday. Exports rose 0.9 percent to a record high of US$185 billion. Overseas sales of autos, pharmaceuticals and industrial machinery increased. Despite Europe's struggling economy, exports to the 27-nation European Union grew 1.7 percent.
Imports fell 1.5 percent to US$227.9 billion, the lowest in four months. A key reason for the drop was the price of imported oil fell by the most in three and a half years. That brought the trade deficit in oil to its lowest level since November 2010 and accounted for half of the improvement in the overall trade gap.
Excluding oil, the trade deficit dropped to US$20.4 billion in June from US$23.2 billion in May. Imports of computer equipment and TVs also declined.
A narrower trade gap acts as less of a drag on growth because it means the United States is spending less on foreign-made products and is taking in more from sales of US-made goods.
The drop in the deficit could mean the economy grew at a faster pace in the April-June quarter than first estimated.
The US trade deficit with China rose 5.2 percent to US$27.4 billion. US sales to China fell, possibly because that country's growth is slowing. Exports to China dropped 4.3 percent to US$8.5 billion.
The trade gap narrowed to US$42.9 billion in June, down from US$48 billion in May, the US Commerce Department said yesterday. Exports rose 0.9 percent to a record high of US$185 billion. Overseas sales of autos, pharmaceuticals and industrial machinery increased. Despite Europe's struggling economy, exports to the 27-nation European Union grew 1.7 percent.
Imports fell 1.5 percent to US$227.9 billion, the lowest in four months. A key reason for the drop was the price of imported oil fell by the most in three and a half years. That brought the trade deficit in oil to its lowest level since November 2010 and accounted for half of the improvement in the overall trade gap.
Excluding oil, the trade deficit dropped to US$20.4 billion in June from US$23.2 billion in May. Imports of computer equipment and TVs also declined.
A narrower trade gap acts as less of a drag on growth because it means the United States is spending less on foreign-made products and is taking in more from sales of US-made goods.
The drop in the deficit could mean the economy grew at a faster pace in the April-June quarter than first estimated.
The US trade deficit with China rose 5.2 percent to US$27.4 billion. US sales to China fell, possibly because that country's growth is slowing. Exports to China dropped 4.3 percent to US$8.5 billion.
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