Page last updated at 13:12 GMT, Wednesday, 10 June 2009 14:12 UK

US trade deficit widens further

Container being unloaded from a ship in Miami
US consumers have been buying less, leading a drop in imports from abroad

The US trade deficit has widened for the second straight month.

The deficit, the difference between what the US exports and imports, rose 2.2% to $29.2bn (£17.8bn) in April from a revised $28.5bn in March.

The increase was driven by oil prices, which have doubled this year, but the gap is still less than in past years.

The trade balance had narrowed to $26.1bn in February, the smallest gap in nine years, as the recession crimped demand for imports.

'Better' outlook

US exports fell 2.3% to $121.1bn, the least since 2006, while imports fell 1.4% to $150.3bn.

But imports of petroleum rose by 2.1% to $18bn. The price of crude oil was around $46 a barrel during the month of April, and has since risen to over $71.

"Even if the rise in the oil price pushes the trade deficit up towards $40bn, this would reverse only a third of the narrowing from around $60bn over the past 12 months," said Paul Dales, and economist at Capital Economics.

"Accordingly, the outlook for the trade position is still much better than it has been for some time."

The deficit with China, which often causes tensions between the two nations, widened by 7.3% to $16.8bn.

The US has accused China of boosting exports by keeping its currency, the yuan, artificially low.

With more people out of work and companies cutting back their spending, the US is now importing less from China and other nations with extensive production bases.

The deficit with Japan, the world's second-biggest economy, rose 23.5% to $3.2bn, as exports dropped to the lowest level in 15 years.

The trade gap with the European Union jumped almost 21% to to $5.3bn in April.



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