Trade Gap Widens on Oil Imports; Jobless Claims Fall
The U.S. trade deficit widened in May as higher oil prices pushed imports to an all-time high, swamping a rise in exports, a government report showed on Thursday.
A separate report showed Americans applying for first-time jobless benefits fell more than expected in the latest week, suggesting continued labor market strength.
The May trade shortfall totaled $60 billion, matching the median estimate of Wall Street analysts surveyed before the report. It widened 2.3% from a revised April deficit of $58.7 billion, the U.S. Commerce Department reported.
U.S. imports rose 2.3% to $192.1 billion, the result of an oil import bill that swelled to $19 billion, its highest level since September.
Average prices for crude oil imports rose more than $2 a barrel in May to $59.36, an eight-month high, and imports from the Organization of Petroleum Exporting Countries jumped almost 10% to a record $14.6 billion.
"This is not a good month but it's not the worst month of the year either. We are still on track for improvement in the trade gap this year," said Kurt Karl, chief U.S. economist, Swiss Re, New York.
Exports did continue to provide a silver lining, with overall goods and services exports rising 2.2%, led by a $1.9 billion rise in civilian aircraft shipments and record exports of consumer goods.
A weaker U.S. dollar and robust growth abroad have supported U.S. exports of late, and that has helped to narrow the U.S. trade gap on an annual basis and boost domestic growth.
In the first five months of the year, the deficit stood at $295.5 billion, below $317.8 billion in the same period last year. In 2006, the trade gap hit a record $758.5 billion.
Also on Thursday, the Labor Department said the number of U.S. workers applying for jobless benefits fell 12,000 to a seasonally adjusted 308,000 last week from an upwardly revised 320,000 the prior week.
Economists were expecting a more modest dip to 315,000. The four-week moving average, a more reliable gauge of employment conditions because it irons out weekly fluctuations, slipped to 317,750 from 319,250.
"These trade and jobless numbers are not out of line with what we have been seeing. The economy is growing, and it is growing modestly. We had a good month or so," said Robert Lutts, president and chief investment officer at Cabot Money Management in Salem, Massachusetts.