Oil prices push trade deficit up
August 12, 2005
Higher oil prices sent the US trade deficit higher in June and have depressed consumer sentiment at August begins.
They also pushed US import prices up by 1.1 percent, according to government figures.
The trade deficit grew by 6.1 percent in June, the Commerce Department said, to $58.8 billion, from May’s figure of $55.4 billion, when exports were at about the same level but purchases of petroleum took imports to a new high level. Analysts had only expected the trade deficit to grow to $57.3 billion in June.
Petroleum exports were a record $19.9 billion. With oil prices up and expected to go even higher, analysts have said that the trade deficit will probably grow more as well, possibly enough to have a negative impact on the gross domestic product in the third quarter.
Meanwhile, in a separate report, the University of Michigan’s preliminary consumer confidence index for August showed consumer sentiment down to 92.7, from 96.5 in July, when it had only been predicted to fall to 96 this month.
Analysts said that consumer sentiment seemed to have an inverse relation to the price of oil; as the price of oil rises, consumer sentiment falls.