The U.S. trade deficit widened much more than expected in June, hitting a record $55.8 billion as the biggest drop in exports in nearly three years combined with record imports, the government said on Friday.
Wall Street economists had expected the deficit to widen, but looked for a gap of just $47 billion. In its report, the Commerce Department also revised May’s trade shortfall to $46.9 billion from the previously reported $46.0 billion.
The department said exports fell 4.3 percent to $92.8 billion in June, the biggest decline since September 2001 and the weakest performance since February.
At the same time, imports climbed 3.3 percent to an all-time high of $148.6 billion, partly reflecting a run-up in oil prices.
Crude oil prices hit $33.76 a barrel, according to the department’s measure, the highest price since March 1982. The quantity of crude imported also rose to a record level.
While other recent data had led economists to expect an upward revision to the government’s measure of second-quarter economic growth, the trade data was likely to lead them to lower their sights.
In its first snapshot of the second quarter, the government said U.S. gross domestic product advanced at a 3 percent annual rate, a sharp slowdown from the swift 4.5 percent pace at the start of the year.
The trade report showed the politically sensitive trade gap with China widened to a record $14.2 billion as exports eased and imports soared to an all-time high. U.S. manufacturers and labor groups complain that Beijing’s policy of holding the value of its currency, the yuan, steady against the dollar has given it an unfair trade advantage.
The Bush administration has claimed it is making progress getting China to move toward a more flexible currency regime, but Democrats want to ratchet up the pressure with a trade investigation.
The report also showed the U.S. trade gap with Mexico reached a record.
For the first half of the year, the trade gap came in at $287.7 billion, putting it well ahead of the same period last year and on track to break last year’s record $496.5 billion.