Subscribe free to our newsletters via your
. Earth Science News .


Subscribe free to our newsletters via your




















US July trade deficit swells on oil, Chinese imports

by Staff Writers
Washington (AFP) Sept 11, 2008
The US trade deficit rose sharply to 62.2 billion dollars in July, the largest gap in more than a year, on record high oil prices and surging Chinese imports, government data showed Thursday.

The July trade gap was wider than the consensus forecast for an increase to 58.0 billion dollars. It was the largest shortfall since March 2007 and followed two consecutive months of shrinking deficits.

The deficit rose nearly six percent from a June deficit of 58.8 billion dollars, revised sharply higher from the prior estimate of 56.8 billion.

Analysts said the July data indicated international trade likely will continue to underpin growth in the US economy, which accelerated to a 3.3 percent pace in the second quarter, as a weak dollar bolstered exports, though the dollar has recently strengthened.

"Trade volumes suggest that trade will add at least 1.0 percentage point to third-quarter growth, a solid contribution -- albeit less dramatic than the 3.1-percentage-point contribution in the second quarter," said Nigel Gault, analyst at Global Insight.

July exports rose 5.4 billion dollars to a total 168.1 billion dollars and imports were up 8.7 billion dollars to 230.3 billion, the department said.

On a 12-month basis, the July trade deficit was 4.9 billion dollars higher than a year ago.

Peter Morici, a University of Maryland economist, highlighted the huge trade deficit's weight on US gross domestic product (GDP) growth.

"Money spent on Middle East oil, Chinese televisions and coffee markers, Japanese and Korean cars can't be spent on US made goods and services, unless offset by a comparable amount of exports," Morici said.

"At about 5.2 percent of GDP, the trade deficit is a significant drag on economic growth and destroys millions of high-paying US jobs."

Morici predicted GDP growth "will slow or turn negative in the third and fourth quarters."

Oil imports accounted for more than half of the July trade gap, the Commerce data showed. Petroleum imports rose to 43.4 billion dollars from a revised 37.3 billion, the sharpest increase in the year to date, as crude oil prices skyrocketed.

The average price of imported oil shot up to 124.66 dollars a barrel, from 117.13 dollars in June.

Oil prices hit record highs above 147 dollars a barrel on July 11, but have since fallen about 30 percent as investors fret about softening demand in the slowing global economy.

The politically sensitive issue of ballooning Chinese imports was in focus. Chinese imports ballooned 16.1 percent to a seasonally adjusted 24.9 billion dollars.

The trade data comes ahead of high-level US-China trade talks next week in California. Critics say China maintains its yuan currency undervalued to bolster exports, and US lawmakers blame outsourcing to China for the loss of thousands of jobs.

Among major trading partners, the US trade deficit with the European Union leapt to unadjusted 11.0 billion dollars in July from 8.2 billion the prior month.

The gap with Canada rose 15.3 percent to 8.3 billion dollars and the deficit with Japan edged 3.3 percent higher to 6.3 billion dollars.

And the shortfall with the Organization of the Petroleum Exporting Countries (OPEC) surged 33.6 percent to a record 24.2 billion dollars.

However, with oil prices treading near 100 dollars a barrel and the dollar strengthening since July, the deficit was expected to shrink in following months.

"The energy situation has already been unwound and there could be a massive cut in the trade deficit was that works through the August and September numbers," said Joel Naroff at Naroff Economic Advisors.

Community
Email This Article
Comment On This Article

Share This Article With Planet Earth
del.icio.usdel.icio.us DiggDigg RedditReddit
YahooMyWebYahooMyWeb GoogleGoogle FacebookFacebook



Related Links
The Economy



Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News


China inflation drops as trade surplus hits record high
Beijing (AFP) Sept 10, 2008
Inflation in China fell for a fourth straight month in August while the trade surplus hit a record high, data said Wednesday, with analysts blaming weakening domestic demand.







  • Desperate Cuba charges US is 'lying' on storm aid
  • Haiti death toll from four storms at least 326: gov't
  • Hopes fade for 'several hundred' missing in China landslide
  • Cuba reels from battering by two storms

  • New Book Examines Upper US Gulf Coast Climate Change And Sea-Level Rise
  • Scientists promote 'global cooling' plan
  • Thawing Permafrost Holds Vast Carbon Pool
  • Petascale Climate Modeling Heats Up At University Of Miami

  • GMES Under The Spotlight In France
  • Report Explores Use Of Earth Data To Support National Priorities
  • European science satellite launch is delayed
  • China launches environmental satellites

  • Analysis: Russia and OPEC deepen ties
  • EU deputies seek to limit use of biofuels
  • Gulf of Mexico, hub of US oil industry
  • Oil prices drop as dollar firms, demand jitters persist

  • Toll rises to 121 in Uganda hepatitis epidemic
  • Sharp unveils new anti-bird flu air purifier
  • HIV-positive Swazi women march against royals' shopping binge
  • Matsushita says new DNA technology identifies disease risks

  • The Rosetta Stone For Understanding Evolution
  • Tiny Life Forms Swiftly Move In As Andean Glacier Retreats
  • What Came First: Viruses Or Cells
  • New Research Challenges Long-Held Assumptions Of Flightless Bird Evolution

  • Scientists Find Oil Leak Threatening Chuuk Lagoon
  • Solution Found For World's Worst Mass Poisoning Case
  • Chemists Identify Sources Of Mexico City's Smokey Air
  • EPA completes river cleanup

  • A Tiny Ancestral Remnant Lends Developmental Edge To Humans
  • Racial lung cancer models aid predictions
  • Melting Swiss glacier yields Neolithic trove, climate secrets
  • Study reveals Australia suffering from 'man drought'

  • The content herein, unless otherwise known to be public domain, are Copyright 1995-2007 - SpaceDaily.AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement