US trade gap swells in May

The US trade deficit unexpectedly widened sharply in May, topping $50 billion dollars for the first time since October 2008, official data showed Tuesday. The trade gap expanded to a seasonally adjusted $50.2 billion in May, from a downwardly revised $43.6 billion in April, according to figures released by the Commerce Department. Most analysts expected the gap to increase marginally in May, to $44.0 billion, after the April deficit shrank to the lowest level of the year reflecting the impact of Japan's March 11 earthquake and tsunami disaster on US supply chains. Imports rose 2.6 percent led by a 9.0 percent surge in oil imports as crude oil prices spiraled. The world's largest oil-consuming country bought foreign oil at an average price of $108.70 a barrel, the highest level since August 2008, a month after oil prices had hit an all-time peak. The US trade gap on petroleum products reached the biggest shortfall since October 2008, at $30.4 billion. Apart from petroleum products, US demand for foreign goods edged up only 0.5 percent. Imports of consumer goods fell 2.3 percent, the data showed. However, imports of industrial equipment rose 2.6 percent and Americans snapped up 4.9 percent more foreign automobile goods. US exports, which hit a record high in April, fell 0.5 percent in May. But they remained at the second-highest level in the department's records, at $174.9 billion. The big May deficit was still not close to the country's record deficit of $67.4 billion set in August 2006. Since then, the world's biggest economy has been bolstered by exports to rapidly growing emerging-market economies.