14 Jul 2010

US trade deficit widens

7:51 am on 14 July 2010

The US trade deficit widened to its highest level in 18 months in May, driven by demand for imported cars, computers and clothing.

Commerce Department data issued on Tuesday showed the deficit increased by 4.8% to $US42.3 billion - the largest since November 2008.

The 2.9% rise in imports outpaced a rise of 2.4% in exports. However, oil imports dropped by 9.1% because of a lower oil price and lower volumes.

The BBC reports US manufacturing has benefited from the global economic recovery, but debt troubles in Europe have caused the value of the euro to weaken against the dollar this year - making US-made goods less competitive in the 16 nations using the euro.