The global economic slowdown widened the US trade gap in June as exports and imports fell to levels not seen since early 2000, the US government said in a report today that may lead to a downward revision in second-quarter US economic growth.
The gap grew to $29.41 billion, up from a revised $28.47 billion in May. Sales of goods and services to major US trading partners, such as Western Europe and Canada, dropped in the month.
Exports fell more sharply than imports, dipping to $85.95 billion. Imports of goods and services also fell, dropping for a third straight month to $115.36 billion. The levels of imports and exports were the lowest since February 2000.
The number may fuel speculation that economic growth in the second quarter was flat or even negative. When the Commerce Department made its initial estimate that gross domestic product grew at a 0.7 per cent annual rate, it lacked several key pieces of economic data.
Sales of capital goods abroad, at $27.06 billion, were at their lowest level since November 1999. American manufacturers have pinned their difficulties in exporting in large part on the continued strength of the US dollar in foreign exchange markets. They have lobbied the Bush administration to back off on its "strong dollar" policy, though with little success.
The trade picture with major trading partners was mixed. The gap with Western Europe fell slightly, even though exports dropped substantially. The trade gaps with China and Japan grew, however, and the trade deficit with Mexico, at $3.12 billion, was the largest on record.
