Trade deficit unexpectedly widened in June

The decrease in exports took place in industrial supplies and materials and foods, feeds and beverages. 

Economists were forecasting that lower oil prices and a recovery in exports from a May decline, the first in 10 months, were expected to narrow the trade gap.

“Exports remain a driving force in our economy,” said Acting U.S. Commerce Secretary Rebecca Blank in a statement. “Although numbers in June were lower than we’d hoped, exports have grown at a steady pace for the first half of this year, posting 15.8 percent growth over last year,” she said. 

“While we are at a fragile time in the world economy, the Administration will continue to innovate to help our businesses compete globally, stabilize the economy, strengthen the middle class and accelerate hiring in communities and towns across the nation.”

Imports dropped 0.8 percent to $223.9 billion as crude oil prices dropped and oil imports decreased 4.3 percent to $38.2 billion, with the average price falling to $106 a barrel from $109 in May, the first decline in prices in nine months, according to the Commerce Department. 

The decrease in imports were in industrial supplies and materials, automotive vehicles, parts and engines, capital goods and consumer goods, while there were increases in foods and feeds, and beverages hit a record in June. 

The trade deficit with China was up 6.8 percent $26.7 billion in June, from $25 billion the previous month — the highest since September, as imports from China hit their highest level since November.

“A rising trade deficit is not the prescription for job creation in America,” said Alliance for American Manufacturing Executive Director Scott Paul in a statement. 

“I’m particularly concerned by the rising trade deficit with China. Unless we achieve a major rebalancing with China, our manufacturing sector will continue to experience long-term challenges,” he said. 

“Unless the Obama administration gets tougher with China, we’ll continue to see high trade deficits and anemic job growth.”

Meanwhile, the trade deficit with the European Union rose 12.2 percent to $9.8 billion, the highest since July 2008. 

Supply chains with Japan, especially in the auto industry that were slowed by the March earthquake and tsunami, appeared to pick up pace in June. 

Imports from Japan increased 14 percent to $9.5 billion, and the trade gap widened to $4 billion from $2.6 billion. 

Shipments of automobiles from Japan were up to $2.7 billion in June from $2 billion.