The US trade gap widened unexpectedly in May as a jump in imports from China pushed the deficit to its highest point since May 2008.
The trade deficit grew by 4.8 per cent to $42.3bn, according to commerce department figures. That diverged from economists’ forecasts that the gap would shrink in May.
During the past year, the US trade shortfall with the rest of the world has soared by 70 per cent as global demand recovered after a severe collapse.
In May, US imports continued to outpace exports, rising by almost 3 per cent to $194.5bn. US exports climbed by 2.4 per cent to $152.3bn as global appetite for capital goods, industrial supplies and consumer items picked up.
“Both imports and exports have been on strong growth tracks, powered by inventory cycles here and abroad,” said Joshua Shapiro, chief US economist at MFR. “However, tentative signs are beginning to emerge that the boost from the inventory swing is starting to fade and final demand growth will therefore become increasingly important in driving trade flows.”
Growing demand for consumer goods in the US fuelled the May rise in imports. The US imported more sporting goods, clothing, toys, televisions and household furniture.
Imports from China, which is the country’s biggest and most politically sensitive trade partner, rose by 11.9 per cent. That pushed the US trade gap with China to $22.3bn, its highest since last October.
Last week official Chinese figures showed that exports from China had surged 44 per cent year-on-year in June, lifting its trade surplus to $20bn. Such imbalances have raised anxiety in the US, although US policymakers were appeased last month when the Chinese central bank abandoned its near-two-year peg to the dollar.
Meanwhile, US shortfalls with the European Union and Mexico also increased in May, while deficits with Japan and Germany eased.
