May Trade Balance Report

By Jul 11, 2008, 2:29 PM Author's Blog  

The Commerce Department reported on Friday the U.S. trade deficit in goods and services declined to $59.8 billion in May from $60.5 billion in April. Economists expected a trading gap deficit of $62.5 billion.

During the March-May period, exports averaged $154.8 billion, while imports averaged $213.7 billion, thus the $59.8 billion in average trade deficit.

May exports increased $1.4 billion and were up $23.9 billion — almost 18% higher on a year-over-year basis. The gain in exports for the month of May was primarily driven by fuel oil, chemical fertilizers, and other petroleum products.

May imports were $0.7 billion more than April imports of $216.7 billion. This is a relatively small rise when compared with the large spike we experienced in April. Imports were up $24.2 billion — 12.5% higher versus a year ago. With oil trading now above $135 p/bl, the cost of imports is likely to rise further in coming months.

The weaker dollar and a high demand overseas continues to boost U.S. exports. The “export” factor is adding significantly to real GDP growth. Meanwhile, imbalance in global trade remains a problem, as the deficit with China showed. It stood at $21.0 billion in May – by far the largest deficit with any single country, followed by OPEC $17.9 bln and the European Union $7.9 bln.

Today’s report on declining trade deficit numbers, further reinforces the idea — that tax rebates are not the main reason for keeping our economy out of recession. The fact is – the trade sector is largely contributing to economic growth, not consumption.

  • SHARE:
  • Share on StockTwits

LEAVE A COMMENT

SPY197.80  chart+0.08  chart +0.04%
GOOG590.60  chart+1.58  chart +0.27%
AAPL99.02  chart+1.349  chart +1.38%
TSLA224.82  chart+1.25  chart +0.56%
BBRY9.95  chart-0.32  chart -3.12%
NFLX424.66  chart+2.80  chart +0.66%
FB74.92  chart-0.27  chart -0.36%

Nikkei15529.4  chart+71.53  chart +0.46%
Shanghai0.00  chartN/A  chartN/A
UK6788.07  chart-3.48  chart -0.05%
France4344.77  chart+14.22  chart +0.33%
Germany9598.17  chart-45.84  chart -0.48%