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U.S. trade gap widens
But shortfall of $57 billion is less than expected; March number revised down.
June 10, 2005: 10:12 AM EDT

NEW YORK (CNN/Money) - The U.S. trade deficit widened in April, the government reported Friday, but the expansion was less than expected.

The Commerce Department said U.S. imports outstripped exports by $57 billion last month, up from a revised $53.6 million in the previous month. The March trade deficit number was revised down from an earlier number of $55 billion.

Economists surveyed by Briefing.com had forecast that the gap would rise to $58 billion.

Oil prices were responsible for some of the increase in the size of the trade gap. Oil imports rose to $14 billion from $13.4 billion, even with a drop in the amount of oil imported. The average price for crude oil imports rose to $44.76 a barrel from $41.14 in March.

The trade gap with China also increased again to $12 billion from $10.4 billion in March.

But the trade gap was tempered by a solid rise in exports to a record $106.4 billion from $103.4 billion in March, which had been the previous record. Aircraft showed one of the biggest increases in exports, soaring $928 million to $3.2 billion in the period.

"That's a very volatile category. We can't necessarily count on the increase we've seen in that category to continue the rest of the year," said Jason Schenker, economist with Wachovia Securities.

Schenker said that while the long-term trend of rising trade gaps is likely to continue, the May trade gap could see a decline. That's because even though the record oil price of $58.28 was reached in April, when the May futures contract was trading, the price fell rapidly after that.

That left the May futures trading at an average of about $51 overall said Schenker, down about 6 percent from the April futures that affected the most recent trade report.

"That should translate into lower trade gap figure in the month of May," he said.

Despite problems with General Motors Corp. (Research) and Ford Motor Co. (Research) losing market share to Japanese and European automakers, the imports of automobiles and auto parts declined slightly in April to $19.4 billion from $20.6 billion.

But while imports from Japan, South Korea and Germany declined by $830 million, imports from Canada, where GM and Ford have their own plants, also fell by $491 million. The Asian automakers also have their own U.S. assembly plants.

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