By Bob Willis
July 11 (Bloomberg) -- The U.S. trade deficit widened in May as record oil prices pushed up the value of imports faster than American companies expanded their exports, economists said before reports today.
The gap grew 2.6 percent to $62.5 billion, according to the median forecast in a Bloomberg survey of 74 economists before a Commerce Department report, compared with a shortfall of $60.9 billion the prior month. Another report from the Labor Department may show the cost of imported goods increased in June for a sixth month, as commodity prices surged.
Rising prices for oil, metals and other imported commodities are boosting the trade deficit. Still, the dollar's six-year slide, coupled with stronger growth in Asia, Latin America and the Middle East, is spurring demand for equipment made by companies such as Caterpillar Inc., helping to keep the economy from contracting.
``It's the high energy prices that are causing the trade deficit to widen,'' said Jay Bryson, global economist at Wachovia Corp. in Charlotte, North Carolina. ``Beneath the surface, our sense is that trade will contribute positively to growth again in the second quarter.''
The Commerce Department will issue the report at 8:30 a.m. in Washington. Economists' estimates of the deficit ranged from $59.5 billion to $65 billion.
Another report at the same time from the Labor Department may show import prices rose 2 percent last month, according to a Bloomberg survey of economists. That would bring the year-over- year gain to 18.6 percent, and compares with a 2.3 percent rise in May from the prior month.
Consumer Confidence
Gasoline over $4 a gallon helped push consumer confidence in July to near-three-decade lows, economists surveyed said before another report today. The University of Michigan/Reuters preliminary confidence index for July probably came in at 55.5, the lowest since 1989, from 56.4 at the end of June. The survey will be released at 10 a.m. New York time.
The economy probably grew 1.5 percent in the second quarter, as growing exports helped counter weakness in manufacturing and construction, according to a Bloomberg survey of economists taken the first week of July. The economy grew 1 percent in the first quarter, when net exports contributed 0.8 percentage point to the expansion.
Tax Rebates
About $78 billion in tax rebates probably gave consumer spending a boost in the second quarter, helping to spur purchases of foreign televisions and cars. Economists surveyed by Bloomberg forecast consumer spending rose 2 percent in the April-to-June period, compared with a 1.1 percent gain in the first quarter.
Faster growth overseas is spurring exports of U.S.-made goods, ranging from Boeing Co. aircraft, to mining and construction equipment, steel and grains. China's economy grew 10.6 percent in the first quarter from a year earlier. India's expanded 8.8 percent, Argentina's 8.4 percent and Brazil's 5.8 percent.
In response to growing demand from China, Caterpillar, the world's biggest maker of earthmoving equipment, will build a factory in eastern China to make light hydraulic excavators for the world's largest earthmover market after the U.S.
``Our customers in China are demanding a greater variety of construction equipment,'' Mary Bell, Caterpillar's global vice president for construction machines, said in a statement June 30.
Dollar's Decline
U.S. exporters are also getting a boost from the dollar, which was down 8.3 percent against a trade-weighted basket of currencies of major trading partners in the 12 months ended in May. The dollar is down by about 27 percent since February 2002, and that has helped push up the price of commodities.
Charlotte, North Carolina-based Nucor Corp., the largest U.S.-based steelmaker by market value, is working to keep up with surging demand from emerging economies, many of them profiting from gains in prices of oil and other commodities, Chief Executive Officer Dan DiMicco said on June 25.
``Because of the global shortage of steel, we have a strong ability to export,'' DiMicco said in an interview in New York. Demand for steel and other commodities is in a ``30-plus-year bull market,'' he said, as emerging economies including China and India expand infrastructure.
Bloomberg Survey
================================================================
Trade ImportU of Mich
Balance Prices Conf.
$ Blns MOM% Index
================================================================
Date of Release 07/11 07/11 07/11
Observation Period May June July P
----------------------------------------------------------------
Median -62.5 2.0% 55.5
Average -62.6 2.0% 55.3
High Forecast -59.5 3.0% 57.0
Low Forecast -65.0 0.6% 51.0
Number of Participants 74 52 60
Previous -60.9 2.3% 56.4
----------------------------------------------------------------
4CAST Ltd. -63.9 2.5% 54.5
Action Economics -63.5 2.4% 55.0
AIG Investments -63.0 --- 57.0
Aletti Gestielle SGR -63.3 --- 55.0
Argus Research Corp. -62.5 0.6% ---
Banc of America Securitie -62.1 --- ---
Bank of Tokyo- Mitsubishi -62.6 1.6% 55.0
Bantleon Bank AG --- 2.1% 55.0
Barclays Capital -63.5 2.3% 53.5
BBVA -62.0 1.6% 51.0
BMO Capital Markets -61.9 1.7% 55.5
BNP Paribas -62.4 1.5% 55.5
Briefing.com -61.0 --- 55.0
Calyon -61.5 --- 55.5
CFC Group -61.7 --- 57.0
CIBC World Markets -63.0 --- ---
Citi -65.0 2.4% 56.0
ClearView Economics -61.5 --- ---
Credit Suisse -62.7 1.5% 56.0
Daiwa Securities America -61.5 --- 55.0
DekaBank -62.0 2.1% 55.0
Desjardins Group -64.1 1.5% 53.0
Deutsche Bank Securities -61.0 2.5% 56.0
Deutsche Postbank AG -62.0 2.0% 56.0
Dresdner Kleinwort -64.3 2.2% 55.0
DZ Bank -61.5 1.9% 54.5
First Trust Advisors -62.1 1.8% 56.0
Fortis -63.2 --- 56.0
GCI Capital --- 2.0% ---
Global Insight Inc. -62.8 --- 56.0
Goldman, Sachs & Co. -61.5 --- ---
H&R Block Financial Advis -62.0 1.8% ---
Helaba -59.5 1.5% 54.0
High Frequency Economics -63.0 3.0% 53.0
Horizon Investments -63.0 2.2% 54.0
HSBC Markets -63.5 1.5% 56.0
IDEAglobal -61.5 2.0% 55.5
Informa Global Markets -64.3 1.5% 56.0
ING Financial Markets -62.5 --- 56.0
Insight Economics -63.0 2.5% 55.0
Intesa-SanPaulo -62.5 2.3% 55.0
J.P. Morgan Chase -61.1 1.9% 56.0
Janney Montgomery Scott L -62.0 2.1% ---
JPMorgan Private Client -60.5 --- ---
Landesbank Berlin -63.0 1.6% 53.0
Lehman Brothers -62.5 2.2% 55.0
Lloyds TSB -62.0 2.0% 56.0
Maria Fiorini Ramirez Inc -63.0 2.8% ---
Merrill Lynch -64.4 1.0% 56.0
Moody's Economy.com -61.7 1.9% 57.0
Morgan Keegan & Co. -62.5 1.6% ---
Morgan Stanley & Co. -64.0 --- ---
National Bank Financial -64.0 --- 57.0
National City Corporation -62.9 1.4% 56.4
Natixis -64.6 2.5% 54.0
Newedge -61.8 --- 55.2
Nomura Securities Intl. -62.0 --- ---
Nord/LB -63.0 3.0% 57.0
PNC Bank -64.0 --- ---
RBS Greenwich Capital -64.0 --- 55.0
Ried, Thunberg & Co. -63.5 2.8% 56.0
Schneider Trading Associa -61.2 2.1% 53.8
Scotia Capital -63.5 2.1% ---
Societe Generale -62.5 --- 56.0
Stone & McCarthy Research -63.2 1.5% 55.5
TD Securities -62.0 --- 55.0
Thomson Financial/IFR -62.3 1.8% 56.0
Tullett Prebon -62.7 --- 55.5
UBS Securities LLC -63.5 2.0% 56.0
Unicredit MIB -62.5 1.5% 54.0
University of Maryland -60.9 0.7% 55.5
Wachovia Corp. -62.5 --- ---
Wells Fargo & Co. -63.5 2.4% 54.0
WestLB AG -62.0 2.0% 56.0
Westpac Banking Co. -62.5 2.0% 55.0
Wrightson Associates -63.5 2.8% 56.0
================================================================
To contact the reporters on this story: Bob Willis in Washington at bwillis@bloomberg.net
Posts
No comments:
Post a Comment