Deficit driven by higher oil imports; biggest gap since fall 2008
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The U.S. trade deficit jumped 15.1% in May to the highest level in almost three years, largely because of the increased cost of oil imports.
The trade gap widened to a seasonally adjusted $50.2 billion from $43.6 billion in April, the Commerce Department reported Tuesday. It was the biggest monthly deficit since October 2008.
Economists surveyed by MarketWatch forecast the trade deficit to rise to $44.5 billion.
Imports increased 2.6% to $$225.1 billion, while exports fell less than 1% to $174.9 billion.
The deficit in goods — items like autos, electronics or crops — climbed $6.7 billion to $64.9 billion.
The surplus in services, such as legal advice, accounting or entertainment, edged up to $14.7 billion.
The bulk of the increase in imports was tied to the higher cost of oil, whose price hit a recent peak in May. Imports of crude oil and related petroleum products jumped to a seasonally adjusted $34.9 billion in May from $30.6 billion in April.
The trade deficit in petroleum alone totaled $30.4 billion, the highest level since October 2008.
The petroleum gap should shrink in June, however, because of a sharp fall in the price of oil in late spring.
Imports from China, meanwhile, climbed to $32.8 billion in May from $29.6 billion in April. As a result, the trade deficit with the rising Asian giant increased $3.4 billion to $25 billion in May. Country data is not seasonally adjusted.
The U.S. also showed deficits of $11.3 billion with OPEC nations, $8.8 billion with the European Union, $6.3 billion with Mexico, $2.7 billion each with Canada and Saudi Arabia and $2.6 billion with Japan.
Canada, Mexico and Saudi Arabia are the three largest exporters of petroleum to the U.S., based on the latest data from the federal Energy Information Administration.
Jeffry Bartash is a reporter for MarketWatch in Washington.
