The U.S. trade deficit narrowed more than forecast in June as the biggest drop in crude oil prices in more than three years helped cut the nationâ€™s import bill.
The gap shrank 11 percent to $42.9 billion, the smallest since December 2010, from $48 billion in May, Commerce Department figures showed today in Washington. The median forecast in a Bloomberg News survey of 69 economists called for the deficit to shrink to $47.5 billion. Exports climbed to a record on demand for autos and industrial engines.
â€œThis is mostly an oil-related story,â€ Omair Sharif, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, said before the report. â€œGoing forward, youâ€™re going to see both imports and exports cooling. Weâ€™re really not expecting trade to do much for third-quarter growth.â€
The better-than-projected reading may help boost second- quarter growth figures when the government revises the data later this month. The recent rebound in oil prices and slowing economies in Europe and Asia mean the deficit will probably not keep contracting, making it more difficult for trade to aid the economic expansion.
Bloomberg survey estimates ranged from a deficit of $44 billion to $50 billion. The Commerce Department revised the trade deficit for May from an initially reported $48.7 billion.