Washington: The trade deficit in the US widened in April to the highest level in more than a year, as exports fell more than imports.
The gap grew 0.6 per cent to $40.3 billion (Dh148 billion), the most since December 2008, figures showed Wednesday. The increase signals trade will subtract from economic growth this quarter.
The fallout from the European debt crisis may keep limiting trade flows in coming months as the subsequent plunge in oil prices restrains imports. The increase in the value of the dollar since the turmoil began also makes American goods less competitive abroad, raising the risk that gains in exports, that have helped lift companies like Dow Chemical, could cool.
The declines in imports and exports follow "big growth in both those categories in March so could just be some payback," said Michael Feroli, chief US economist at JPMorgan Chase & Co in New York. Trade's contributions to growth will diminish, he said, "particularly now that you have the added factor that the dollar is strengthening and foreign growth might be slowing, particularly in Europe."
Jobless benefits
More Americans than previously projected filed applications for unemployment benefits last week, a sign firings remain elevated even as the economy is expanding, it also emerged yesterday. Jobless claims dropped by 3,000 to 456,000 in the week ending June 5.
Stock-index futures held earlier gains after the reports. The contract on Standard & Poor's 500 Index rose one per cent to 1,066.3 at 8.57am in New York. Treasury securities fell, pushing the yield on the benchmark 10-year note up to 3.22 per cent from 3.18 per cent late Wednesday.
