US trade deficit at five-year high: Economic growth estimates likely to be cut
The unexpectedly large deficit fuelled fears that the department will today cut its estimate of US economic growth in the second quarter.
The seasonally-adjusted trade gap between April and June was dollars 34.39bn (pounds 23m), up from dollars 29.31bn in the first quarter and above Wall Street forecasts. This was the biggest deficit since the last quarter of 1987. Non-military imports rose to a record dollars 147.51bn, while exports edged up to dollars 113.13bn.
The US had a dollars 3.5bn trade deficit with Western Europe in the second quarter, having run a dollars 1.1bn surplus in the first. The deficit with Japan fell by dollars 500m to dollars 14.1bn.
The dollar strengthened against the German mark in slack trading in New York despite fears that the downgrade to second quarter growth would be larger than first estimated. It closed 0.80 pfennigs up at DM1.6720, but was unchanged against the yen.
Separate figures showed that sales of new homes fell 5 per cent in July to an annual rate of 629,000, while the June figure was revised sharply downwards to 662,000.
The Commerce Department provisionally estimated that national output had grown at an annual rate of 1.6 per cent in the second quarter. Before yesterday's trade figures economists were already expecting this to be revised down to around 1.1 per cent.
The White House is expected to slash its current forecast of 3 per cent growth this year when it issues its review of economic prospects later in the week.
The gloom over growth failed to dent share prices in New York. By the close, the Dow Jones average was up 3.36 points at 3,643.99.
The Tokyo market closed higher for the fifth successive trading day. The Nikkei average was 121.01 points higher at 20,912.69.
The French stock market closed at its third successive record high, with the CAC-40 index rising 21.79 points to 2,205.67 in thin trading. The labour ministry announced that unemployment in France had risen by 26,000 in July to a record 3,211,800, 11.7 per cent of the workforce.
Apple has been hit by complaints about the 1.1GB download
Liam Neeson's Downton dreams
Thriller is set in the secret world of British espionage
Bomber jacket worn by Mary Berry sells out within an hour
Matt Smith is set to join cast of the Jane Austen classic - with a twist
Much-loved cartoon character returns - without Sir David Jason
Actress to appear in second series of the hugely popular crime drama
- 1 Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
- 2 Scottish independence: Learn from Quebec's mistakes and beware of promises. Vote Yes.
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 4 Revealed after 75 years of secrecy: 'Fifi' the glamorous WW2 special agent who tested British spies' resolve
- 5 Have you heard about the film Singapore has banned its people from watching? Well, you have now
Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
Scottish independence: Final opinion polls show undecided voters could swing result either way
Scottish independence: Almost half of No voters have felt 'personally threatened' by the Yes campaign
Isis release 'Flames of War' video warning Obama of attacks troops could face in Iraq
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Portuguese academic says British are 'filthy, violent and drunk'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
iJobs Money & Business
£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...