U.S. exports gain, despite Eurozone crisis and China slowdown
WASHINGTON — The nation’s trade deficit narrowed for the second straight month in May as American exports eked out a 0.2% gain from April — despite the global economic slowdown and the strengthening of the U.S. dollar, the Commerce Department reported Wednesday.
Though the latest data are better than expected, other indicators suggest U.S. exporters will feel an increasingly bigger hit from the Eurozone crisis and the slowdown in China. Manufacturing has been a big contributor to the American recovery and job growth, but it has weakened since spring along with the broader economy.
In May, the U.S. trade deficit shrank to $48.7 billion from $50.6 billion in April, on a seasonally adjusted basis. Some analysts were projecting another month of a deficit of about $50 billion.
American exports of goods and services in May rose by about $400 million to $183.1 billion, thanks partly to a rebound in the shipment of capital goods such as industrial equipment and stronger sales of farm products, including soybeans and animal feed.
U.S. imports fell in May by $1.6 billion to $231.8 billion, but that was mostly because of a drop-off in crude oil and petroleum products. American imports of capital goods and cars actually increased over the month.
U.S. shipment of goods to Europe rose to $28.1 billion in May, from $27.5 billion in April. For the first five months of this year, U.S. sales of merchandise to the continent were up 5% from a year ago, to $141.7 billion. That accounted for about 22% of all American exports of products during that five-month period.
Still, the U.S. trade deficit with Europe so far this year is little changed from a year ago.
And the politically sensitive U.S. trade imbalance with China went up in May, bringing the five-month deficit to $117.7 billion — up 11% from $106.8 billion in 2011.
Obama administration officials highlighted the total U.S. exports in May, saying they were the second largest on record and would help President Obama reach his goal of doubling exports in five years, a pledge he made in 2009.
But critics pointed to the persistent increase in the U.S. deficit with China, despite the overall smaller trade gap, arguing that it shows the Obama administration’s economic approach toward China has failed and needs to be overhauled.
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