The U.S. trade deficit widened slightly in June due to surging oil prices, government data showed Wednesday in a report suggesting the global recession may be bottoming out.
The Commerce Department reported the U.S. trade deficit grew to $27 billion from a revised $26 billion in May.
The June deficit was less than the $28.5 billion expected by most analysts but showed gains in both imports and exports, suggesting trade flows are picking up after steep declines.
"Trade is still a long way from being normal. But the normalizing trends are in place," said Robert Brusca of FAO Economics.
Joel Naroff of Naroff Economic Advisors said the deteriorating trade situation "should actually be cheered." "It means the U.S. economy is growing again, and we are sucking in products from all across the globe," he said.
A sharp rise in crude oil prices accounted for much of the headline increase and the politically sensitive deficit with China also rose.
Excluding oil products, the Commerce Department noted the U.S. trade deficit was its weakest since January 1999, at $20 billion, and 11.7% below the May level.
"At the current rate of improvement, non-oil trade will be in surplus by the end of this year," said Ian Shepherdson of High Frequency Economics.
The June trade deficit was 55% below the level of a year ago. The Commerce Department said that adjusted for inflation, the deficit was the smallest since December 1999.
Trade volume jumped 2.2% in June after a weak 0.4% rise in May amid signs the global economy may be fighting its way out of the deepest recession since World War II. In April volume sank to its lowest level of 2009 after nine straight months of decline.
In June, imports rose 2.3% from the previous month, to $152.8 billion, and were at their highest level since January. Goods imports rose for the first time, after falling for 10 months in a row.
Exports increased for the second month running, by 2% to $125.8 billion, and were the strongest since February, signaling some recovery in demand from U.S. trade partners.
"The second consecutive gain in exports gives another sign of the picking up in the global demand. This should weigh particularly positively on the U.S. economy recovering processes, as consumption remains weak -- consumer goods imports decreased by 4.8%," said Inna Mufteeva of Natixis.
Surging crude oil prices continued to boost the overall trade gap.
The oil products trade deficit, while far from its record 2008 levels, jumped 29.3% from May to $17.2 billion, or 63.7% of the total trade gap. The average price of a barrel of imported oil continued its spectacular rise in June, to $59.17, up 16% from the previous month.
That was 51% higher than in February, when the price fell to a low of $39.22.
Among other imported goods, capital goods slipped 0.3%, while food rose 1.2%, vehicles leapt 8.5% and industrial supplies and materials soared 11.8%, after falling in nine of the past 10 months.
In another positive sign that foreign demand is building, the U.S. services surplus reached $11.4 billion, its highest level since October.
By region, the goods trade deficit with Canada, the biggest U.S. trade partner, more than tripled, to $1.6 billion. The politically sensitive gap with China, the second-largest U.S. trade partner, swelled to $18.4 billion from $17.5 billion in May. That was its highest level since January.
The deficit with the 16-nation eurozone nearly doubled, to $4.1 billion. With Japan, the deficit rose to $3.7 billion from $1.9 billion in May.
Copyright Agence France-Presse, 2009