Rise in Imports, Exports Widens US Trade Deficit

Summary: US Trade Deficit Expands to $27.0 billion in June as surging oil prices, and prices of other commodities continues to rise.

The Commerce Department said that the deficit increased by $1 billion from last May’s $26.0. But despite the increase, it is slightly lower than what most analysts predicted.

The US Commerce Department on Thursday said the country’s trade deficit has widen its gap as prices of oil and other major commodities surge in June. This, as the department said that the recession may hit bottom before the third quarter of 2009.

Based on the data presented by the Commerce Department, the US trade deficit has grown to $27.0 billion in June, which is slightly less to $28.5 billion projected by analysts. In May, the countries deficit is $26.0.

In an interview, FAO Economics senior economist Robert Brusca said that the US economy is showing good signs in both exports and imports, saying that it is now at the corner after a long freefall due to the recession.

He added that like most projection, the economy will be sluggish with its recovery. But he said that it is normalizing and trends are already in place.

Meanwhile, despite the widened deficit, Naroff Economic Advisor Joel Naroff said that the government should actually cheer the deteriorating trade situation, saying that the US economy is working and is now making some growth.

“The rise in imports only shows that it is growing because we are now able to suck in products from other parts of the world,” he said.