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Last Updated: Thursday, 10 August 2006, 14:45 GMT 15:45 UK
US trade deficit narrows slightly
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Record exports of farming goods helped to narrow the US trade gap in June, the Department of Commerce has said.

June's deficit dipped 0.3% to $64.8bn (50.3bn), while May's trade gap was revised up by $1.1bn to $64.97bn.

Imports also hit record levels, led by consumer goods and vehicles, offsetting the effect of rising exports.

Despite the improvement, the trade gap for 2006 looks set to surpass last year's record of $716.7bn, as the annual rate is running at $768bn.

Analysts have blamed rising oil prices for much of the deterioration in the trade gap.

Oil prices bite

Crude prices have hit new records above the $70-a-barrel mark in recent months, mainly as a result of rising global instability - particularly as a result of increased tensions in the Middle East - and amid higher demand from developing countries like China.

The total level of petroleum imports was equivalent to almost half of June's deficit - $27.3bn - the second highest level for such imports on record after May's $28.3bn.

Meanwhile, the country's politically-sensitive trade gap with China widened to $19.7bn from $17.7bn in May, as US exports to China fell 4.3% while imports increased by 8.1%.

Some in the US have accused China of keeping its currency artificially weak in order to boost exports while US manufacturers claim cheap imports from China are hurting business and driving millions of Americans out of work.

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