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U.S. Trade Deficit of $62.2 Billion Exceeds Forecast

Thursday, September 11, 2008 |

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The U.S. trade deficit widened more than forecast in July as oil imports soared to a record, overshadowing gains in exports.

The gap grew 5.7 percent to $62.2 billion, the largest in 16 months, from a revised $58.8 billion in June that was bigger than previously estimated, the Commerce Department said today in Washington. Total imports and exports were the highest ever.

Americans paid a record $124.66 a barrel for foreign crude oil, more than offsetting increases in shipments of automobiles, aircraft and machinery to buyers overseas. While a weak dollar has made U.S. goods more affordable, shrinking economies in Europe and Japan may stifle export growth in coming months.

Continued at Bloomberg

Goldmau.com comment:

The larger US deficit with import greater than export and a slowing down of economy (rate will remain at current level for sometime), pressure will be placed on the $USD on its recent climb. The next leg down in $USD will bring the equity market lower but boosting the commodity market before the start of the next economic recovery which will be economically driven.

Commentary courtesy David Cai, Goldmau.com analyst.

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