US trade gap hits $59bn as oil price soars
Independent Online Edition > Business News : app1
the average price of oil imports was $44.40 a barrel in June, far below the new record level of $66 reached yesterday.
By Rupert Cornwell in Washington
Published: 13 August 2005
The US trade deficit jumped 6.1 per cent to $58.8bn (£32.4bn) in June - worse even than the gloomiest analysts had predicted - as exports stagnated and imports climbed to a record high, propelled by the soaring cost of oil.
According to Commerce Department, the total deficit for the first half of this year grew to $343bn, compared with $291bn in the same period of 2004. The deficit is thus poised to shatter last year's record of $617bn, and approach or exceed 6 per cent of the country's GDP.
The impact has already been felt on foreign exchange markets where, after recovering earlier in the summer, the dollar has started to tumble again.
Despite the steady rise in interest rates which should buttress the currency, traders are again focusing on the huge external imbalance of the US that floods the markets with dollars.
For June, analysts had been expecting a deficit of about $57bn, compared with the $55bn shortfall in May. In the event, the figure was even worse, as oil imports - which now account for 60 per cent of total US consumption - hit a record of $19.9bn.
That burden moreover is likely to grow in the months ahead. The Commerce Department calculated that the average price of oil imports was $44.40 a barrel in June, far below the new record level of $66 reached yesterday.
Oil import prices are set far in advance, but the current market levels - due in part to strong seasonal demand for petrol in the US and refinery problems - are bound to work their way through in the months ahead, according to analysts. The overall trade deficit is now again approaching the all-time monthly peak of $60.1bn registered in February 2005. Exports rose fractionally in June to $106.8bn, but total imports climbed more rapidly, by 2.1 per cent to $165.6bn.
In public, US officials maintain that the ever-growing trade imbalance reflects the fact that the economy here is growing more rapidly than its competitors in Europe, sucking in imports from the rest of the world.
Another reason is America's insatiable appetite for goods from China. The bilateral deficit hit a record $17.6bn in June, as imports from China reached an unprecedented $21bn. US officials do not believe that last month's modest revaluation of the renminbi will do much to right the imbalance, and are likely to keep up their pressure on Beijing to allow the Chinese currency to float higher.
The US trade deficit jumped 6.1 per cent to $58.8bn (£32.4bn) in June - worse even than the gloomiest analysts had predicted - as exports stagnated and imports climbed to a record high, propelled by the soaring cost of oil.
According to Commerce Department, the total deficit for the first half of this year grew to $343bn, compared with $291bn in the same period of 2004. The deficit is thus poised to shatter last year's record of $617bn, and approach or exceed 6 per cent of the country's GDP.
The impact has already been felt on foreign exchange markets where, after recovering earlier in the summer, the dollar has started to tumble again.
Despite the steady rise in interest rates which should buttress the currency, traders are again focusing on the huge external imbalance of the US that floods the markets with dollars.
For June, analysts had been expecting a deficit of about $57bn, compared with the $55bn shortfall in May. In the event, the figure was even worse, as oil imports - which now account for 60 per cent of total US consumption - hit a record of $19.9bn.
That burden moreover is likely to grow in the months ahead. The Commerce Department calculated that the average price of oil imports was $44.40 a barrel in June, far below the new record level of $66 reached yesterday.
Oil import prices are set far in advance, but the current market levels - due in part to strong seasonal demand for petrol in the US and refinery problems - are bound to work their way through in the months ahead, according to analysts. The overall trade deficit is now again approaching the all-time monthly peak of $60.1bn registered in February 2005. Exports rose fractionally in June to $106.8bn, but total imports climbed more rapidly, by 2.1 per cent to $165.6bn.
In public, US officials maintain that the ever-growing trade imbalance reflects the fact that the economy here is growing more rapidly than its competitors in Europe, sucking in imports from the rest of the world.
Another reason is America's insatiable appetite for goods from China. The bilateral deficit hit a record $17.6bn in June, as imports from China reached an unprecedented $21bn. US officials do not believe that last month's modest revaluation of the renminbi will do much to right the imbalance, and are likely to keep up their pressure on Beijing to allow the Chinese currency to float higher.
the average price of oil imports was $44.40 a barrel in June, far below the new record level of $66 reached yesterday.
By Rupert Cornwell in Washington
Published: 13 August 2005
The US trade deficit jumped 6.1 per cent to $58.8bn (£32.4bn) in June - worse even than the gloomiest analysts had predicted - as exports stagnated and imports climbed to a record high, propelled by the soaring cost of oil.
According to Commerce Department, the total deficit for the first half of this year grew to $343bn, compared with $291bn in the same period of 2004. The deficit is thus poised to shatter last year's record of $617bn, and approach or exceed 6 per cent of the country's GDP.
The impact has already been felt on foreign exchange markets where, after recovering earlier in the summer, the dollar has started to tumble again.
Despite the steady rise in interest rates which should buttress the currency, traders are again focusing on the huge external imbalance of the US that floods the markets with dollars.
For June, analysts had been expecting a deficit of about $57bn, compared with the $55bn shortfall in May. In the event, the figure was even worse, as oil imports - which now account for 60 per cent of total US consumption - hit a record of $19.9bn.
That burden moreover is likely to grow in the months ahead. The Commerce Department calculated that the average price of oil imports was $44.40 a barrel in June, far below the new record level of $66 reached yesterday.
Oil import prices are set far in advance, but the current market levels - due in part to strong seasonal demand for petrol in the US and refinery problems - are bound to work their way through in the months ahead, according to analysts. The overall trade deficit is now again approaching the all-time monthly peak of $60.1bn registered in February 2005. Exports rose fractionally in June to $106.8bn, but total imports climbed more rapidly, by 2.1 per cent to $165.6bn.
In public, US officials maintain that the ever-growing trade imbalance reflects the fact that the economy here is growing more rapidly than its competitors in Europe, sucking in imports from the rest of the world.
Another reason is America's insatiable appetite for goods from China. The bilateral deficit hit a record $17.6bn in June, as imports from China reached an unprecedented $21bn. US officials do not believe that last month's modest revaluation of the renminbi will do much to right the imbalance, and are likely to keep up their pressure on Beijing to allow the Chinese currency to float higher.
The US trade deficit jumped 6.1 per cent to $58.8bn (£32.4bn) in June - worse even than the gloomiest analysts had predicted - as exports stagnated and imports climbed to a record high, propelled by the soaring cost of oil.
According to Commerce Department, the total deficit for the first half of this year grew to $343bn, compared with $291bn in the same period of 2004. The deficit is thus poised to shatter last year's record of $617bn, and approach or exceed 6 per cent of the country's GDP.
The impact has already been felt on foreign exchange markets where, after recovering earlier in the summer, the dollar has started to tumble again.
Despite the steady rise in interest rates which should buttress the currency, traders are again focusing on the huge external imbalance of the US that floods the markets with dollars.
For June, analysts had been expecting a deficit of about $57bn, compared with the $55bn shortfall in May. In the event, the figure was even worse, as oil imports - which now account for 60 per cent of total US consumption - hit a record of $19.9bn.
That burden moreover is likely to grow in the months ahead. The Commerce Department calculated that the average price of oil imports was $44.40 a barrel in June, far below the new record level of $66 reached yesterday.
Oil import prices are set far in advance, but the current market levels - due in part to strong seasonal demand for petrol in the US and refinery problems - are bound to work their way through in the months ahead, according to analysts. The overall trade deficit is now again approaching the all-time monthly peak of $60.1bn registered in February 2005. Exports rose fractionally in June to $106.8bn, but total imports climbed more rapidly, by 2.1 per cent to $165.6bn.
In public, US officials maintain that the ever-growing trade imbalance reflects the fact that the economy here is growing more rapidly than its competitors in Europe, sucking in imports from the rest of the world.
Another reason is America's insatiable appetite for goods from China. The bilateral deficit hit a record $17.6bn in June, as imports from China reached an unprecedented $21bn. US officials do not believe that last month's modest revaluation of the renminbi will do much to right the imbalance, and are likely to keep up their pressure on Beijing to allow the Chinese currency to float higher.
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