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.
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 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.
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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.
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Despite the smaller monthly trade gap, the annual deficit remained on track to surpass last year's record of $497 billion.
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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.
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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.
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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.
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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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