May trade deficit at $63.8 billion
July 12, 2006
The US trade deficit was higher in May than it was in April, but still came in lower than had been anticipated by analysts. The increase from April to May was entirely due, according to reports, to the higher cost of crude oil, which was $4.92 per barrel higher in May than it was in April. In the absence of that rise in prices, the deficit would have been $3.9 billion lower in May than in April.
The May deficit was up 0.8 percent to $63.8 billion. It has been expected to hit $64.9 billion. Meanwhile, exports of goods and services were up 2.4 percent in May, to $118.7 billion. Exports of civilian aircraft, consumer goods, and industrial supplies and materials were up, while the export of vehicles, parts and engines were down during the month. Analysts said that the increase in exports relative to imports was a sign that the US economy is slowing down as domestic demand drops.
The May trade deficit with China was up to $17.7 billion. The growing US debt to China has been behind recent calls from Congress and the Bush administration for China to revalue its currency.
The total trade deficit for January to May of this year is at $317.9 billion, putting it on track to exceed the $716.7 billion record trade deficit in 2005.
Dollar stronger on new data
July 5, 2006
The US dollar strengthened on Wednesday after new figures were released, saying that 368,000 new jobs were created in June. It had been estimated that the month would see 155,000 new jobs created in the month. Analysts said that if the ADP National Employment Report numbers are accurate, the wage inflation that could result will likely spur the Federal Reserve to continue raising interest rates. In addition, a separate report showed that US factory orders were higher than had been anticipated. Some analysts warned, however, that the ADP report figures might not match Bureau of Labor Statistics numbers when they are announced on Friday.
The greenback added 0.4 percent to C$1.1123 in relation to the Canadian dollar, while it was up 0.5 percent versus both sterling and the euro, to $1.8345 and $1,272 respectively. The US currency gained 0.7 percent to ¥115.66 against the Japanese yen.
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