US trade deficit at five-year high: Economic growth estimates likely to be cut
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE UNITED STATES recorded its biggest trade deficit with the rest of the world for more than five years between April and June, according to US Commerce Department figures published yesterday.
The unexpectedly large deficit fuelled fears that the department will today cut its estimate of US economic growth in the second quarter.
The seasonally-adjusted trade gap between April and June was dollars 34.39bn (pounds 23m), up from dollars 29.31bn in the first quarter and above Wall Street forecasts. This was the biggest deficit since the last quarter of 1987. Non-military imports rose to a record dollars 147.51bn, while exports edged up to dollars 113.13bn.
The US had a dollars 3.5bn trade deficit with Western Europe in the second quarter, having run a dollars 1.1bn surplus in the first. The deficit with Japan fell by dollars 500m to dollars 14.1bn.
The dollar strengthened against the German mark in slack trading in New York despite fears that the downgrade to second quarter growth would be larger than first estimated. It closed 0.80 pfennigs up at DM1.6720, but was unchanged against the yen.
Separate figures showed that sales of new homes fell 5 per cent in July to an annual rate of 629,000, while the June figure was revised sharply downwards to 662,000.
The Commerce Department provisionally estimated that national output had grown at an annual rate of 1.6 per cent in the second quarter. Before yesterday's trade figures economists were already expecting this to be revised down to around 1.1 per cent.
The White House is expected to slash its current forecast of 3 per cent growth this year when it issues its review of economic prospects later in the week.
The gloom over growth failed to dent share prices in New York. By the close, the Dow Jones average was up 3.36 points at 3,643.99.
The Tokyo market closed higher for the fifth successive trading day. The Nikkei average was 121.01 points higher at 20,912.69.
The French stock market closed at its third successive record high, with the CAC-40 index rising 21.79 points to 2,205.67 in thin trading. The labour ministry announced that unemployment in France had risen by 26,000 in July to a record 3,211,800, 11.7 per cent of the workforce.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments