America's trade deficit swelled to $11.31 billion in June, the second highest imbalance in history, as a big drop in U.S. exports offset a smaller decline in imports of cars and consumer goods.
The Commerce Department said Thursday that the monthly deficit in goods and services trade was up 2.4 percent from a revised May imbalance of $11.05 billion. It was the largest imbalance since a record $11.42 billion set in April.The worsening of America's trade performance in June caught analysts by surprise. They had been predicting that the slowing U.S. economy would trim Americans' appetite for imports and this would help lower the deficit.
"We keep thinking that the import totals should ebb somewhat in response to the slowdown of the American economy, but so far that isn't the case," said Robert Dederick, economic consultant at Northern Trust Co. in Chicago.
Imports did fall during the month, dropping by 0.6 percent to $75.79 billion. However, U.S. exports to the rest of the world fell even faster, falling 1.2 percent to $64.48 billion. The trade deficit is the difference between what Amer-ica sells abroad and what it imports.
There had been fears that a worse-than-expected trade performance might undo recent government efforts to bolster the value of the dollar, but the U.S. currency weakened only slightly immediately after release of the trade report.
With the third straight $11 billion-plus deficit in June, the United States is well on track to suffer the biggest merchandise trade deficit in history. It was running at an annual rate of $188.3 billion through the first six months of this year, which would top the old mark of $152 billion set in 1987.
In other economic news, the Labor Department reported Thursday that new claims for unemployment benefits rose by 6,000 last week to 338,000, the highest level since the week ending July 22.