In an unexpected surge, the U.S. trade deficit widened in May to its highest level in nearly three years following an increase in oil prices. The deficit ballooned 15 percent to $50.2 billion up from $43.63 billion in April, according to a Tuesday Commerce Department report. Wall Street analysts had expected the gap would hover around $44 billion. "The rebound in oil prices to levels not seen since the 2008 spike has wiped the modest reduction in the trade gap from late last year," reports The Wall Street Journal, also noting that China's weak currency has increased the trade deficit, with the gap between the two nations rising from $21.6 billion in April to $25 billion in May. On the upside, an economist speaking with Bloomberg suggests that the next deficit report will be more positive. “The big picture is exports will continue to rise as imports rise more slowly because we’re getting some relief on our imported oil bill,” Stuart Hoffman, chief economist at PNC Financial Services Group said. The CEO of Smithfield Foods, one of the world's largest hog slaughterhouses, was also optimistic. “We’re in an environment of cheap U.S. dollars and with a balance between supply and demand, both domestically and around the world,” said C. Larry Pope. “The industry has been reporting quarter after quarter improved export volumes."
This article is from the archive of our partner The Wire.
We want to hear what you think about this article. Submit a letter to the editor or write to firstname.lastname@example.org.