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

SPY198.9697  chart-0.5303  chart -0.27%
GOOG582.38  chart-0.99  chart -0.17%
AAPL101.04  chart+0.46  chart +0.46%
TSLA254.00  chart-0.34  chart -0.13%
BBRY9.90  chart+0.055  chart +0.56%
NFLX472.50  chart+0.45  chart +0.10%
FB74.39  chart-0.18  chart -0.24%

Nikkei15539.19  chart-47.01  chart -0.30%
Shanghai0.00  chartN/A  chartN/A
UK6756.54  chart-21.12  chart -0.31%
France4236.73  chart-56.20  chart -1.31%
Germany9300.24  chart-101.29  chart -1.08%