US Trade Deficit Highest Since October 2008

The US trade deficit widened in June 2010 on the back of record consumer goods imports, questioning the veracity of economic recovery. According to the Department of Commerce, the trade deficit expanded well over 18% in June, reaching almost $50 billion from $42 billion reported in May. This is the largest widening of the deficit since October 2008, and the biggest one-month worsening since June 2009. Imports from Germany and the EU were at their highest since October 2008. Imports from Asian countries such as South Korea and Taiwan were at their highest since July 2008. Imports from the UK also were at their peak since October 2009. This deficit could lead to wider revisions to the US GDP in the second quarter, according to trade experts. Economists have already cut the growth estimate for GDP in Q2 to 1.6%, down from the initial government estimates of 2.4%. Imports rose 3% to $200 billion in June, while exports fell 1.3% to $150.5 billion. Import of goods leaped 3.3% to $167 billion, while export of goods slipped 2.2% to $105 billion. The US trade deficit with China widened to $26.2 billion in June, up from $18.4 billion reported in June 2009. Similar trend has occurred in case of trade deficit with Mexico and the EU. Read more