June Trade Gap Narrowed Slightly
WASHINGTON
-- The U.S. trade balance improved slightly in June as rising
sales of cars and capital goods offset a higher price for oil
and a big increase in consumer-products imports. Also, May's
level was revised upward. Meanwhile, the number of new applicants
for unemployment insurance rose more than expected last week,
but the four-week moving average of new jobless claims continued
to drift down.
The
U.S. deficit in international trade of goods and services decreased
by 0.3% to $64.80 billion from $64.97 billion in May, the Commerce
Department said Thursday. May's shortfall was previously estimated
at $63.84 billion. The June trade deficit matched exactly the
median estimate of 22 economists surveyed by Dow Jones Newswires
and CNBC. Through the first half of this year, the deficit is
running at an annual rate of $768 billion, putting it on track
to surpass last year's record of $716.7 billion. Democrats hope
to use the worsening trade deficit to attack Bush administration
trade policies and argue that a tougher approach is needed,
particularly with countries such as China.
The
deterioration in the deficit this year is largely a result of
soaring global oil prices, reflecting increased tensions in
the Middle East and higher demand from developing countries
such as China. U.S. exports in June increased 2% to $120.74
billion in June, from $118.39 billion in May. Sales rose by
$882 million for capital goods, including computer accessories
and airplane engines. Exports rose by $154 million for consumer
goods, like jewelry. Sales of industrial materials such as chemicals
were up $733 million. Exports of foods and beverages increased
by $185 million. Sales of autos and parts climbed $401 million.
U.S.
imports grew by 1.2% to $185.55 billion, from $183.37 billion
in May.
The volume of crude oil imports increased to 330.86 million
barrels, up from 323.83 million. The average price of a barrel
of crude rose by 30 cents to a record $62.04. The value of crude
oil imports increased to $20.53 billion from $19.99 billion
in May. But the nation's bill for all energy-related petroleum
products fell, slipping to $26.96 billion from May's $27.91
billion. Purchases of industrial materials such as natural gas
and liquefied petroleum gases from overseas decreased by $643
million. Imports of capital goods like computers decreased by
$100 million. But purchases of cars and parts made abroad rose
by $1.21 billion. Consumer goods imports -- including clothing
and televisions -- also jumped by $1.21 billion. Imports of
foods and beverages decreased by $36 million.
Deficits
with major trading partners were mixed.
The deficit with China expanded to $19.71 billion from $17.71
billion in May. The trade gap with the euro area fell to $7.60
billion from $8.26 billion. The monthly shortfall with Mexico
increased to $6.09 billion from $5.52 billion.
The trade gap with Canada decreased, shrinking to $5.66 billion
from $5.88 billion. The deficit with Japan fell to $6.98 billion
from $7.14 billion.
Jobless
Claims Show Tight Labor Market
Initial jobless claims increased 7,000 to a seasonally adjusted
319,000 in the week ending Aug. 5, the Labor Department said
Thursday. New claims for the week ended July 29 were revised
down to 312,000 from a previously reported 315,000. The four-week
moving average of new claims still fell 3,750 last week to 308,750
-- the fourth straight week this rolling average has declined.
Last
week another Labor Department report showed the jobs market
was weaker than expected in July, as nonfarm payroll jobs grew
113,000 and the unemployment rate rose 0.2 percentage point
to 4.8%. The second quarter's slower jobs growth and decelerating
economy were considered key factors in the Federal Reserve's
decision this week to suspend its two-year credit-tightening
campaign. Thursday's Labor report shows the number of workers
drawing unemployment benefits for more than a week grew in the
week ended July 29, the latest week for which such data are
available. These continuing jobless claims increased 48,000
to 2,480,000.
The
jobless rate for workers with unemployment insurance was 1.9%,
unchanged from the previous week. In all, 37 states and territories
reported a decrease in unadjusted claims for the week ended
July 29, while 16 reported an increase. Michigan had the biggest
decrease, citing fewer layoffs in the auto industry; it was
followed by Tennessee, which cited fewer layoffs in the industrial
machinery, service and manufacturing sectors. California reported
the biggest increase in new claims, citing layoffs in trade
and services industries.
