US Trade Deficit Narrows in May
Export surge spurred by a weaker dollar and a marked pickup in overseas economies
WASHINGTON, DC - 07/15/04 - The US trade deficit narrowed unexpectedly in May as stronger growth overseas and the weak US dollar helped propel exports to record levels.
According to the US Census, the overseas sales of US products during the month jumped nearly 3% to a record $97 billion with US exporters seeing demand for a variety of their products increase.
Simply, the export surge was helped by a weaker dollar, which makes US goods cheaper for foreign buyers, and a marked pickup in overseas economies.
Sales of American-made automobiles, engines and parts rose by 1.3%, to $7.2 billion, a record high, while industrial supplies, including chemicals and plastic materials, also hit an all-time monthly high of $17.3 billion in May, up from $16.3 billion the month before.
Exports of capital goods, such as airplanes and industrial engines, climbed to $28.8 billion, the highest level since March 2001.
US imports increased fractionally in May to a record $143 billion, aided by a record oil import bill of $11 billion.
On the import side, sales of foreign-made automobiles and parts also hit a record high of $19.4 billion in May, up from nearly $19 billion in April.
Imports of foods, feeds and beverages were valued at a record $5.2 billion in May.?
The May trade gap of $46 billion was below a median estimate of $48 billion forecasted?by Wall Street analysts surveyed before the report, narrowing for the first time in six months despite the highest prices for imported oil in nearly 22 years.
Despite the smaller monthly trade gap, the annual deficit remained on track to surpass last year's record of $497 billion.
In the first five months of this year, the trade gap has grown from $209 billion to $231 billion during the same period in 2003.
The politically sensitive trade deficit with China rose slightly to $12 billion as imports from that country leapt to their second highest level on record. US exports to the country rose more than 6% to $2.9 billion.
The trade gap with the 25-member European Union shrank 17.6% to $7.9 billion, while the shortfall with Japan narrowed 13.7% to $5.5 billion.
The US trade deficit with NAFTA trading partners Mexico and Canada bulged 17.6% to $3.8 billion and contracted 15.3% to $4.8 billion, respectively, with the deficit with Hong Kong, South Korea, Singapore and Taiwan, combined, shrinking 28.2% to $1.3 billion.
The deficit with the Organization of Petroleum Exporting Countries (OPEC) grew 5.8% to a record $7 billion with trade gap with those countries reaching a record $6 billion.
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