June trade deficit rises to $27B, imports increase
WASHINGTON -- The U.S. trade deficit edged up slightly in June as imports rose for the first time in 11 months, another sign that the worst recession since World War II is beginning to loosen its grip on the economy.
The Commerce Department said Wednesday that the deficit rose 4% to $27 billion, from May's $26 billion. The May imbalance had been the lowest deficit in nearly a decade.
While the politically sensitive deficit with China widened in June, the imbalance so far this year is running below last year's record pace. More good news for American exporters came as the U.S. defeated China in a major case before the World Trade Organization which could provide significant market opportunities for U.S. producers of everything from CDs and DVDs to music downloads and books.
The bigger June deficit reflected an increase in imports for the first time in nearly a year, an indication that demand in the U.S. is starting to revive.
In a good sign for American producers, exports rose for the second straight month. That could be a signal global demand also is starting to rebound.
Imports of goods and services climbed 2.3% to $152.8 billion. A 23.8% jump in petroleum to $21.5 billion led the increase. That was the largest amount this year, reflecting higher volume and rising oil prices. Imports of other products also rose, led by autos, computers and civilian aircraft.
Exports rose 2% to $125.8 billion, good news for America's manufacturing sector, which has seen demand slump domestically and in key foreign markets as the recession that began in the U.S. in December 2007 spread worldwide. Big gains in shipments of semiconductors, civilian aircraft and engines, and telecommunications equipment led the overall export increase.
Meanwhile, the WTO ruled that China had acted improperly by forcing America media producers to route their business in China through Chinese state-owned companies, a decision that could set a larger precedent for U.S. automakers and other American firms.
