Notes of Note from John F. Ince

The U.S. trade deficit jumped unexpectedly in May to the highest level since November 2008, prompting some analysts to cut their second-quarter economic growth forecasts sharply and economists to warn of rising risks of a double-dip recession.

The Commerce Department said Tuesday that the trade gap rose to $42.3 billion in May, up nearly 5% from April’s $40.3 billion. Economists had expected the May deficit to dip slightly to about $39 billion as oil prices were lower and retail sales fell that month.

But American purchases of foreign-made computers, machinery and particularly household goods, notably from China, increased significantly in May. Analyst Diane Swonk attributed much of the surprising import gains to stockpiling by retailers and producers who are fearful of a potential trade war with China.

via Trade deficit jumps: Surprise jump in U.S. trade deficit stokes fears –


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