Trade deficit grows as imports, exports rise
WASHINGTON - The US trade deficit edged up in June as imports rose for the first time in 11 months and exports rose for the second straight month, confirming that the global recession is easing its grip.
The first back-to-back gains for exports in a year were especially good news for America’s manufacturing sector. Those companies benefited from higher shipments of semiconductors, aircraft, and telecommunications equipment.
The Commerce Department said the deficit rose 4 percent to $27 billion, from May’s $26 billion. The May imbalance had been the lowest deficit in nearly a decade.
The gains in exports, and an even larger increase in imports, contributed to signs the recession is ending. But analysts said a recovery is likely to widen the trade gap. In part, that’s because a rebounding US economy is projected to grow faster than the global economy. Americans’ rising purchases of foreign goods would boost the US trade deficit.
Despite a wider trade gap with China, the imbalance with Beijing so far this year is running below last year’s record pace.
The bigger June deficit reflected an increase in imports for the first time in nearly a year. Economists said the increase shows that US consumer demand is starting to revive. The increase was concentrated in a big jump in America’s foreign oil bill from higher volume and world prices. Still, imports of foreign and auto parts also rose.
In a positive sign for producers, exports rose for two straight months for the first time since hitting a record in July 2008.
Nigel Gault, an economist with IHS Global Insight, predicted the trade deficit for all of 2009 will total $417 billion, a significant improvement from last year’s imbalance of $695.9 billion. The deficit will widen again in 2010 to $544 billion as the US economy begins to recover but stay well below the all-time record of $753 billion set in 2006, he said.
For June, imports of goods and services climbed 2.3 percent to $152.8 billion. Imports of autos and auto parts, computers, and civilian aircraft rose.
Exports rose 2 percent to $125.8 billion, an increase that offered hope for the country’s manufacturing sector that foreign markets are starting to revive.