U.S. Trade Gap Widens

Exports of autos and parts rose 24.5%

The U.S. trade deficit increased in July as trade volume rose and imports surged, government data showed on Sept. 10.

The Commerce Department reported the trade gap jumped to $32 billion, from a revised $27.5 billion.

The July trade deficit was a hefty 16.3% higher than the previous month, the largest percentage increase since February 1999.

The report was a further sign of a nascent recovery in the world's largest economy and around the world from the worst downturn in six decades.

The U.S. trade gap had fallen in May to the lowest level since November 1999 as the global economic crisis strangled trade flows. In July, the trade deficit was 47 % below the year-ago level.

Trade volume with the rest of the world reflected the global recovery underway. After falling for nine consecutive months from August 2008 to April 2009, volume jumped 3.6% in July, accelerating from a 2.3% rise in June.

Imports totaled $159.6 billion, a record 4.7% increase from June in data the Commerce Department began publishing in 1992.

Increases were seen across most categories, led by a 21.5% surge in imports of autos and parts. Industrial supplies rose 3.9%, consumer goods by 5% and capital goods by 4.5%. Food imports were the exception, falling 0.9%.

The trade gap with China widened sharply, as imports increased by the strongest pace since November 2008, pushing the deficit to $20.4 billion.

Exports also rose in July, to $127.6 billion, a 3.2% increase from June that was the strongest gain since May 2008. The increase was driven in part by a 2.4% rise in capital goods and a 24.5% jump in autos and parts.

The trade deficit with Canada rose to $2.2 billion from $1.5 billion in June and that with the 27-nation European Union vaulted to $8 billion from $4.5 billion.

With Japan, the deficit rose to $3.9 billion from $3.7 billion.

The deficit with Mexico, by contrast, shrank to $2.9 billion from $3.4 billion.

Copyright Agence France-Presse, 2009

TAGS: The Economy
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