U.S. Trade Deficit Sets a Record Again in June; Hits $24.62 Billion By HELENE COOPER
WASHINGTON -- The U.S. trade deficit again set a record in June,
hitting $24.62 billion for the month as America's demand for foreign
imports swelled.
The deficit in goods and services,
seasonally adjusted, increased $3.45
billion from May's revised $21.17
billion, which itself was a record, the
Commerce Department reported.
June's deficit was the worst U.S. trade
performance since the Commerce
Department began compiling the
monthly trade statistics in 1992.
Imports shot up $3.87 billion, to
$102.99 billion, but economists were
expecting that: The U.S. economy
remains strong and American
consumers have been on a buying binge. What wasn't expected was the
anemic rise in U.S. exports -- they crept up only $415,000, to $78.37
billion.
Economic forecasts have been predicting that the recoveries in Asia and
Europe would finally start to show up in U.S. export performance, as
crisis-hit Asian countries supposedly are starting to buy more U.S. goods.
But June's trade figures say the recovery abroad may not be as broad as
many have hoped.
'Early State of Recovery'
"Continued anemic growth abroad still dogs exporters," said David
Huether, economist with the National Association of Manufacturers.
"Much of Asia is still in an early state of recovery."
Last month, economists were saying that
May's record trade deficit would cause them
to revise second-quarter
gross-domestic-product growth estimates to
an annual pace below 3%. June's performance
is bringing estimates even lower now for
second-quarter growth, to below 2%.
"The drag on U.S. growth from deteriorating
trade is intense," said Gerald Cohen, senior
economist with Merrill Lynch & Co. "We
believe that real net exports now cut around
1.5 [percentage points] from the
second-quarter growth."
The politically troublesome trade deficit with China continued to swell,
hitting $5.67 billion in June from $5.25 billion in May. The U.S. deficit with
Japan shot up, to $6.28 billion from $5.26 billion.
Effect of Weaker Dollar
Economists said the deficit with Japan may soon start to come down,
especially as Japan's economy grows. Also, the dollar has fallen some
10% since hitting 124 yen in May, and is now trading at about 111 yen. A
weaker dollar will make U.S. exports cheaper in Japan and should help
decrease the U.S. trade deficit with Japan.
Economists said the U.S. deficit should start to come down in coming
months, especially if the dollar remains weaker.
In other economic news, the Labor Department said the number of
Americans filing for unemployment insurance rose 4,000 to 287,000 for
the week ended last Aug. 14. The result marked the third straight week in
which jobless claims increased. The previous week's claims for
unemployment insurance were revised downward to 283,000 from
284,000.
But the four-week moving average, considered a better gauge because it
accounts for seasonal fluctuations, fell 7,000 to 281,250. It was the lowest
level recorded in 26 years, suggesting even further constriction in the tight
U.S. labor market. |
