The United States trade deficit has surged to the highest it has been in over two-and-a-half years, according to statistics released today by the Commerce Department out of Washington DC.
With the price of crude oil rising in recent months, the Department of Commerce says that the deficit for the month of May hit $50.2 billion, marking the widest the gap has gotten since October 2008.
This statistic also exceeds predictions from over 70 economists that were surveyed by Bloomberg News; those analysts were expecting a deficit of between $40 billion and $48 billion after April saw a trade gap of $43.7 billion.
May’s statistic marks a widening of the gap by an increment of 15 percent since the previous month. In regards to trading with China, the deficit between the US and the Fat East expanded by 15.6 percent in May alone to $25 billion. In 2010, the annual deficit with China hit $273 billion, marking the largeset deficit the US has ever had with another country.
Overall, exports out of America declined by half a percentage point, while the tally of imported goods rose by 2.6 percent to $225.1 billion.
At this rate the deficit is running at an annual rate of $563.2 billion, over 12 percent higher than last year’s imbalance.
Though the increase in oil costs is largely to blame for May’s figures, the price of crude oil has since dropped and analysts predict easing in the next few months. May’s prices also marked the highest the country has seen since October as well, with the price of a barrel of crude oil surging to $108.70.
“Oil has obviously come off, so you’re going to have a significant drop back there,” says Paul Ashworth, chief US economist at Capital Economics Ltd., to Bloomberg. “This quarter, trade will certainly make a strong positive contribution to GDP growth. We’ve had rapid growth in developing countries.”