U.S. trade deficit hits 44-month low
By MARTIN CRUTSINGER Associated Press on Aug 7, 2013, at 2:30 AM Updated on 8/07/13 at 3:45 AM
The container ship Baghira (left) and oil tanker Seabulk Arctic stand anchored offshore as they await entry to Port Everglades in Fort Lauderdale, Fla., on June 28. The U.S. trade deficit fell more than 22 percent in June, the Commerce Department reported Tuesday. WILFREDO LEE/Associated Press
Manufacturing
In just 12 years, natural gas plant builder Thomas Russell Co. grew from a Tulsa startup to a $750 million company.
Verallia North America's glass plant in Sapulpa is shutting down one furnace for the rest of the year because of slack demand.
WASHINGTON - A sharp decline in the trade deficit with other nations suggests the U.S. economy grew this spring at a faster pace than previously estimated, helped by a record level of exports.
The Commerce Department said Tuesday that the U.S. trade gap fell more than 22 percent in June from May to $34.2 billion. That's the lowest level since October 2009.
American companies shipped more aircraft engines, telecommunications equipment, heavy machinery and farm goods. As a result, exports rose 2.2 percent to an all-time high of $191.2 billion.
Imports declined 2.2 percent to $225.4 billion, in part because oil imports fell to the lowest level in more than two years.
Last week the government said the economy grew at a lackluster 1.7 percent annual rate in the second quarter, in part because trade cut nearly a full percentage point from growth.
But after seeing the June trade figures - which were not factored into last month's growth estimate - some economists said growth could be closer to a 2.5 percent annual rate. The government reports its second estimate of growth for the April-to-June quarter on Aug. 29.
A smaller trade deficit lifts economic growth because it means consumers and businesses are spending less on foreign goods than companies are taking in from overseas sales.
For June, U.S. exports to the 27-nation European Union rose 1.5 percent. That helped shrink the deficit with the region to $7.1 billion.
The deficit with China fell 4.3 percent to $26.6 billion, while America's deficit with Japan rose 2.2 percent to $5.5 billion in June.
Gregory Daco, senior economist at IHS Global Insight, said he still thinks trade will drag on the economy in the second half of the year. That's because he expects imports will increase at a faster pace than exports, reflecting the health of the U.S. consumer and weaker growth overseas.
"We still have relatively modest global growth, which will constrain U.S. exports," Daco said.
Activity at U.S. factories increased in July at the fastest pace in two years in July, according to the Institute for Supply Management's closely watched manufacturing index.
Original Print Headline: Nation's trade gap hits 44-month low
Manufacturing
In just 12 years, natural gas plant builder Thomas Russell Co. grew from a Tulsa startup to a $750 million company.
Verallia North America's glass plant in Sapulpa is shutting down one furnace for the rest of the year because of slack demand.
