Friday, August 12, 2011

Trade Deficit in U.S. Unexpectedly Widens to Highest Level Since 2008

The U.S. trade deficit unexpectedly increased in June to the highest level since October 2008 as a slump in exports exceeded a decline in shipments from overseas.

The gap widened 4.4 percent to $53.1 billion from $50.8 billion in the prior month, Commerce Department figures showed today in Washington. The deficit exceeded all estimates in a Bloomberg News survey of economists in which the median was $48 billion. Exports declined the most since January 2009.

U.S. shipments of capital equipment and industrial supplies fell in June, which may reflect the start of a cooling in the global economy. Some companies like Caterpillar Inc. (CAT) remain optimistic that demand for American-made goods will be sustained, helped in part by a weaker dollar.

“The real weakness was in exports and that’s consistent with slower growth in the rest of the world,” said Jay Bryson, a global economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “The contribution of exports is going to be a little more shaky” in terms of growth, he said.

Deficit estimates of 74 economists surveyed by Bloomberg ranged from $42.5 billion to $51 billion. The Commerce Department revised the May shortfall from a previously reported $50.2 billion. (more)