Oil prices push up US trade deficit

Oil prices push up US trade deficit
By Eoin Callan in Washington
Copyright The Financial Times Limited 2007
Published: May 10 2007 15:00 | Last updated: May 10 2007 15:00


The US trade deficit widened more than expected in March to $64bn, as higher oil prices helped push the value of imports to the second-highest level on record, according to fresh figures.

The trade gap climbed 10 per cent from the previous month, the Commerce Department said on Thursday, surprising Wall Street economists who had expected a modest expansion.

The widening deficit belies a strong performance by the export sector, which has increased shipments steadily in recent months to meet global demand

US exports had another strong showing in March, rising 1.8 per cent to $126.2bn.

US exports to the European Union, and specifically in Germany, set records, in a sign that growth in the eurozone is creating demand for US goods.

Exports to China also reached a record, helping to ease the politically-sensitive trade deficit with the country by 6.4 percent to $17bn for the month as imports from China also fell.

The export growth was lifted by record shipments of technology such as telecommunications, aerospace, electronics and computers.

An increase in exports in recent months helped narrow the trade gap for the first quarter to $181bn from $192bn in the same period last year.

But a rise in the average price of a barrel of foreign oil to $53 from $50.71 helped lift the value of US imports by 4.5 per cent to $190bn, contributing to the wider than expected overall trade gap.