WASHINGTON • The United States trade deficit rose to a 10-month high in June as rising domestic demand and higher oil prices boosted the import bill, while the lagging effects of a strong dollar continued to hamper export growth.
The Commerce Department said yesterday the trade gap increased 8.7 per cent to US$44.5 billion (S$59.9 billion) in June, the biggest deficit since August last year.
May's trade deficit was revised slightly down to US$41 billion.
June marked the third straight month of increases in the deficit. Economists polled by Reuters had forecast the trade gap widening to US$43.1 billion in June after a previously reported US$41.1 billion shortfall. When adjusted for inflation, the deficit rose to US$64.7 billion from US$60.9 billion in May.
The government, in its snapshot of second quarter gross domestic product published last week, said trade had contributed two-tenths of a percentage point to the 1.2 per cent annualised growth pace during the period.
With the dollar weakening this year on a trade-weighted basis, some of the drag on exports had started to ebb. But the dollar has been regaining strength in the wake of Britain's June 23 vote to leave the European Union, and economists say that could renew pressure on exports.
Exports of goods and services edged up 0.3 per cent in June. Exports to the EU jumped 7.8 per cent, with goods shipped to the United Kingdom soaring 18.2 per cent. China bought more US-made goods in June, with exports to that country rising 3.6 per cent.
Imports of goods and services increased 1.9 per cent to US$227.7 billion in June, with oil prices accounting for part of the rise. June's increase in imports also reflected a pickup in domestic demand.
Imports from China increased 2.8 per cent. The US-China trade deficit rose 2.5 per cent to US$29.8 billion in June, the biggest gap since last November.