The U.S. trade deficit rose in June to its highest level since October 2008 as soft overseas demand reduced industrial and capital goods exports.
Exports declined 2.3 percent to $170.9 billion from May, while imports fell 0.8 percent to $223.9 billion. The overall trade deficit was $53.1 billion, the Commerce Department said.
Consumer goods imports, excluding pharmaceuticals, fell 2.9 percent, a sign of slowing U.S. demand. The nation’s oil import bill fell $1.8 billion, or 4.3 percent, as volumes dropped 1.3 percent and prices fell 3 percent.
The drop in exports followed a May decline that was preceded by 10 consecutive months of increases.
The trade deficit with China widened 6.8 percent to $26.7 billion while the deficit with the European Union increased 12.2 percent to $9.8 billion, the largest since July 2008. The deficit with Japan, whose automotive and other exports slumped in the aftermath of the March earthquake and tsunami, jumped 53 percent to $4 billion.
The overall report “was in line with the general view of a global slowdown,” Gregory Daco, principal U.S. economist at IHS Global Insight, said in a commentary.
He said the drop in exports suggests “that one of the last fully functioning engines of growth may be faltering,” but that even at a slower pace, “global growth will maintain a decent pull for U.S. exports in the coming quarter.”
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