The US trade deficit increased in June as solid consumer spending pulled in more imports, while the strong dollar restrained exports.
The Commerce Department said the trade gap jumped by 7 percent to US$43.8 billion in June, up from US$40.9 billion in May. Imports increased by 1.2 percent to US$232.4 billion, while exports edged lower to US$188.6 billion from US$188.7 billion.
(Pictured, HS Mozart operated by German shipping company Hansa Shipping, anchored in Commencement Bay near the Port of Tacoma, Washington in February).
US manufacturers have been held back this year by the strong dollar, which makes products more expensive overseas.
Exports of large capital equipment, including telecommunications gear and industrial machinery, fell by 1.7 percent in June. Imports of food, auto parts, and consumer goods such as pharmaceuticals and cellphones surged as Americans spent more.
Even so, the deficit narrowed in the second quarter compared with the first, boosting the economy.
The dollar has risen about 14 percent in value against overseas currencies in the past year. That also makes foreign products cheaper in the US.
The dollar rose to its highest in more than three months on Wednesday after a Federal Reserve official said the central bank was close to raising interest rates, while solid European corporate earnings propelled stocks higher.
In an interview with the Wall Street Journal on Tuesday, Atlanta Federal Reserve President Dennis Lockhart, regarded as one of the Federal Open Market Committee’s centrist policymakers, put next month back on the table for the first U.S. rate hike in almost a decade.
Global bond yields rose and the dollar’s strength kept gold prices anchored near recent five-year lows, though oil clawed back a small part of its 20 percent losses in the past month.
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