US trade deficit hits fresh high

Americans are buying a lot of foreign goods

The US trade deficit grew 3.8% to hit a fresh record of $48.3bn (£26.6bn) in April, the Commerce Department said.

The trade gap widened because of high oil prices and the recovering US economy's appetite for imported goods.

Imports rose 0.2% in April to $142.3bn, while exports failed to live up to expectations, sinking 1.5% to $93.9bn.

The trade deficit took economists by surprise as many had expected it to shrink slightly after hitting a record in March.

They had expected growth in the world economy to lead to more export sales for US firms.

The consensus among economists was for April's trade gap to shrink to just under $46bn, according to a Reuters poll.

Motoring ahead

America's politically sensitive trade deficit with China grew to $12bn in April, the biggest since October 2003.

The shortfall with Japan, however, narrowed to $6.4bn from $6.7bn in March.

"If US consumers are buying, they are buying a lot of foreign goods," said Mark Zandi, chief economist at research firm Economy.com.

The economy will keep barrelling along Mark Zandi, Economy.com

A separate survey from the Commerce Department helped dispel any concerns that US consumers were not venturing to the shops.

According to the figures, retail sales increased by 1.3% in May, yet another sign that the US economic recovery is continuing.

The figure topped both the 1% rise predicted by many economists and the 0.6% drop in retail sales during April.

The car industry was the best performing retail sector, with sales rising 2.7% in May, compared with April's 2.1% decline.

Restaurants behind

There also was increased business at clothing and department stores, health and beauty shops, retailers of sporting goods, music and book sellers, and grocery outlets.

The main fallers were the furniture and building supplies industries, and the restaurant and bar sector, which saw fewer food orders.

"Consumers are shopping aggressively," said Economy.Com's Mr Zandi. "And the economy will keep barrelling along."