Trade Deficit Probably Widened, Imports Rise
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The American trade deficit probably widened and the cost of imported goods jumped, underscoring how the surge in oil prices is hurting growth and igniting inflation, economists said before reports this week.
The gap between imports and exports grew to $62.4 billion in May, the widest in almost two years, according to estimates. Increasing fuel expenses indicate companies will keep cutting payrolls and trimming to maintain profits. At the same time, more expensive foreign goods will open the way for American businesses to also raise prices, signaling inflation may not ebb as the Federal Reserve projects.
The Commerce Department is scheduled to release the trade report on July 11. The Labor Department will issue June import-price figures at the same time.
The price of crude oil futures has risen 50% this year and reached a record $145.85 a barrel on July 3.
