The US trade deficit widened less than expected in April to $63.4 billion, as oil import prices surged close to historic highs and US exports turned in a near record performance, a government report showed today.
Wall Street analysts had expected the trade gap to widen to $65 billion, driven by crude oil prices that surpassed $71 per barrel in April on the back of strong world demand and international tensions over Iran.
Although the month-to-month change was less than expected, the trade gap still grew 2.5 per cent from a slightly revised estimate of $61.9 billion in March. In the first four months of this year, the trade gap was $254.2 billion, on pace to surpass the record of $716.7 billion set for all of last year.
Prices for imported goods rose 1.6 per cent in May, which was more than twice expectations as the cost of petroleum and industrial supplies climbed. The price data added to inflation concerns that could prompt the Federal Reserve to again raise interest rates.
"When you are in a period of inflation phobia, this is not good news. It's not raging inflation, but it's a little worse than expected," said Keith Hembre, chief economist with FAF Advisors in Minneapolis.
Imports of capital goods, such as computers and computer accessories, telecommunication equipment and industrial machines, hit a record while other categories such as automobiles and consumer goods were near records.
US exports, reflecting stronger growth overseas and a decline in the value of dollar in recent years, totaled $115.7 billion in April, just shy of the record high set in March.
Exports to Canada and China, two major US trading partners, were also second only to the records set in March. Even so, the politically sensitive trade gap with China widened in April to $17 billion.
Meanwhile, US exports of industrial supplies and materials, which includes plastics, chemicals and petroleum products, hit a record in April. Exports of services - a broad category ranging from travel and tourism to banking and professionals such as lawyers and architects - also set a record