June Trade Deficit Shrinks; Exports Up

The Commerce Department reported that U.S. trade deficit unexpectedly fell in June as exports advanced to an all-time high, offsetting another big surge in oil imports, ABC News reports.  The trade imbalance dropped to $56.8 billion in June, down by 4.1% from a revised May deficit of $59.2 billion.  It was the smallest deficit in three months and much better than the $61.5 billion deficit Wall Street had expected.

Exports of goods and services rose to a record $164.4 billion, helped by the dollar’s declines earlier in the year.  On the other hand, imports also rose to a record  $164.4 billion, up 1.8% from the May level.  But the increase was driven by a 14.6% surge in petroleum imports, which hit an all-time high of $44.5 billion as crude oil prices jumped to record levels.

Through the first half of this year, the trade deficit is running at an annual rate of $702.8 billion, up only slightly from last year’s deficit of $700.3 billion.  The 2007 deficit was down 7% from 2006, marking the first annual improvement after five straight years of record deficits.