US June trade gap shrinks despite oil price surge
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The US trade deficit shrank unexpectedly in June as the weak US dollar helped push exports higher and overpowered record high prices for imported oil, a Commerce Department report showed on Tuesday.
The trade gap totalled $US56.8 billion, down from a revised estimate of $US59.2 billion in May.
The monthly tally was also much lower than the $US61.5 billion midpoint estimate of 73 analysts surveyed by Reuters before the report.
Both exports and imports of goods and services set records in June, but exports rose by 4.0 per cent compared to a 1.8 per cent gain for imports.
The US trade sector has been one of the bright spots for an economy struggling with a deep housing downturn and credit crunch, and analysts said the data suggested growth in the second quarter was stronger than previously thought.
A preliminary estimate released last month showed US gross domestic product expanded at a 1.9 per cent annual rate in the second quarter, but would have shrunk at a 0.5 per cent pace without a big contribution from trade.
The June trade numbers are "slightly favourable for second-quarter GDP," senior economist at Wachovia Securities in St Louis, Gary Thayer, said.
"Imports will be a little less of a drag on economic growth than appeared earlier. But weaker imports still reflect the overall weakness in the US economy."
US Commerce Secretary Carlos Gutierrez agreed it could prompt the department to raise second-quarter economic growth from its initial estimate of 1.9 per cent.
"It's a very strong month for exports," Mr Gutierrez said.
"The growth is coming from Brazil, it's coming from Russia, it's coming from India, it's coming from the Middle East ... It's very broad-based," he said.
- Reuters
