US trade gap widens

The US trade deficit widened more than expected in April as the price of imported oil hit a record, pushing overall imports to an all-time high, a Commerce Department report showed on Tuesday. The monthly trade gap grew nearly 7.8 percent to $60.9 billion from a downwardly revised $56.5 billion in March.
The gain was the biggest since September 2005, despite a healthy 3.3 percent rise in exports to a record $155.5 billion. Wall Street analysts had forecast a smaller rise in the trade gap to $59.9 billion, from the previous March figure of $58.2 billion. The trade data could boost estimates of first-quarter US economic growth, but weigh on the second quarter, one analyst said.
"We had a big downward revision in the March figure which is good for the first-quarter GDP, but the April number spells badly for the second quarter," said Lou Brien, market strategist at DRW Trading in Chicago. Average prices for imported oil rose $6.96 per barrel in April, the second biggest increase on record. Imports from Saudi Arabia, Venezuela and other members of the Organisation of Petroleum Exporting Countries totalled a record $20.9 billion.
Overall US imports of goods and services were a record $216.4 billion, and showed their biggest one-month gain since November 2002. Although oil accounted for much of the increase, imports of autos and capital goods bounced back from a drop in March. US exports also rebounded to a record $155.5 billion in April after retreating slightly in March. The month-to-month rise was the biggest in more than four years.
The US trade gap with China increased nearly 26 percent in April to $20.2 billion, as imports from that country surged and US exports to China slumped. Meanwhile, two reports suggested US retail sales picked up a bit in early June, but remained sluggish. Redbook Research said its index of chain store sales for the week ending June 7 was up 2.1 percent over its year-ago level, a touch higher than in the prior week. Separately, the International Council of Shopping Centers said its chain store sales index moved up 1.8 percent year-on-year.
CONSUMER CONFIDENCE HITS RECORD LOW: US consumer confidence sank to a record low in June as a surge in gasoline prices to more than $4 a gallon and a jump in the unemployment rate helped torpedo a modest rebound in Americans' outlook seen the previous month, according to a survey released on Tuesday.
Investor's Business Daily and TechnoMetrica Market Intelligence said their IBD/TIPP Economic Optimism Index fell to 37.4 in June from 40.3 in May. June's reading puts the index 28 percent below its lifetime average of 52.1, IBD/TIPP said in a statement. The IBD/TIPP surveyed more than 900 adults in early June.