Trade Deficit Shrinks as Exports Reach Record

Washington, DC, Aug. 12, 2008--The U.S. trade deficit unexpectedly fell in June as exports advanced to an all-time high, according to the Commerce Department.

The government said the trade imbalance dropped to $56.8 billion in June, down by 4.1 percent from a revised May deficit of $59.2 billion. It was the smallest deficit in three months and much better than the $61.5 billion deficit Wall Street had been expecting.

Exports rose to a record of $164.4 billion, helped by the dollar's declines earlier in the year, which have made U.S. goods cheaper on overseas markets.

Imports also rose 1.8 percent from the May level. But the increase was driven by a 14.6 percent surge in petroleum imports, which hit an all-time high of $44.5 billion as crude oil prices jumped to record levels.

The country's goods trade deficit outside of petroleum shrank to the lowest level since February 2003. Demand for a variety of consumer products from clothing to televisions and furniture has weakened, reflecting the sharp economic slowdown in the United States.

The deficit in June, after adjusting for inflation, was the lowest monthly imbalance since December 2001.