US trade gap widening
THE US trade deficit increased the most in more than 10 years in July as rebounding consumer demand led to a record increase in imports, a government report showed yesterday.
The trade gap expanded 16.3 per cent in July to $32bn (£19.2bn), the biggest month-to-month increase since February 1999. Imports leapt a record 4.7 per cent on improved US appetite for foreign cars and consumer goods and on higher oil prices, which rose for a sixth consecutive month. Meanwhile, a second report showed the number of US workers filing new claims for jobless benefits fell last week to 550,000 and the number of workers still collecting benefits fell to 6.088m in the week ended 29 August, the lowest level since the week ended 4 April.
The increase in imports suggests US consumer sentiment may have turned the corner and businesses could be stocking up for the holidays, but the widening trade gap will prompt some analysts to lower their estimate of third-quarter growth.
Wall Street analysts had expected the trade deficit to be little changed from June, which the Commerce Department revised to $27.5bn from its original estimate of $27.0bn.