Oil prices widen US trade deficit

The US trade deficit widened more than expected in March to $63

The US trade deficit widened more than expected in March to $63.9 billion, as higher oil prices helped push total imports to the second highest on record.

A separate report showed oil import prices continued to rise in April, suggesting little relief for the trade deficit in the months ahead.

The trade gap swelled 10.4 per cent from a downwardly revised tally for February, the Commerce Department said, surprising Wall Street economists who had expected a more modest expansion.

The midpoint estimate of analysts surveyed before the report pegged the March trade gap at $60 billion.

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The large March trade gap could prompt analysts to trim their estimates of U.S. economic growth.

A separate Labor Department report showed US import prices rose 1.3 per cent in April, driven by steeper petroleum costs. Prices for imported petroleum climbed 6.5 per cent in April after an 8.1 per cent rise in March.

The Labor Department also reported the number of US workers filing new claims for jobless benefits in the week ended May 5 fell unexpectedly by 9,000 to the lowest level since mid-January.

Overall U.S. imports increased 4.5 per cent in March to $190.1 billion, led by a gain of more than 11 per cent in imports of industrial supplies and materials to $49 billion.

The volume of March crude oil imports rose to their highest level since August 2006, while the average price for imported oil rose to $53.00 per barrel from $50.71 in February.

Record imports of consumer goods and food, feed and beverages also helped push the overall tally higher. However, US exports had another strong showing, rising 1.8 per cent in March to $126.2 billion, second only to the record set in January.

US exports to Canada, the European Union - and individually to Germany - and China set records, while shipments to Japan were the highest since March 2001.