WASHINGTON, July 13 (Reuters) - The U.S. trade deficit widened unexpectedly in May, led by a big jump in imports from China that helped overpower the best month for U.S. exports since September 2008, a government report showed on Tuesday.
The rise in imports shown by the Commerce Department report suggested domestic demand was holding up better than some had feared. But with more of that demand being sated by overseas products, the widening trade deficit is expected to weigh on U.S. gross domestic product.
"On the margin, a growing deficit could detract precious percentage points from second-quarter GDP and in that respect may be mildly negative for the dollar," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington.
The trade gap widened 4.8 percent to $42.3 billion, the largest since November 2008, defying a consensus Wall Street forecast for it to narrow in May to $39.0 billion.
U.S. imports rose 2.9 percent to the highest since October 2008, led by a 12.1 percent increase in shipments from China and stronger U.S demand for consumer goods, autos and capital goods.
The big jump in imports from China is consistent with that country’s own trade data, which showed exports rising sharply in May and June from year-ago levels.
It also gives China’s critics in Congress new ammunition to argue that Beijing is not allowing its currency, known as either the yuan or renminbi, to rise in value fast enough.
The yuan has risen 0.80 percent since Beijing loosened from a peg to the dollar on June 19.
But a number of U.S. lawmakers say it is undervalued by 25 percent to 40 percent, giving Chinese exporters an unfair advantage. They are vowing to move forward with legislation, after the Obama administration declined in a semi-annual report last week to formally name China a currency manipulator.
U.S. exports had their best showing since September 2008, when world trade was in the early stages of a deep plunge as a result of the global financial crisis.
The 2.4 percent rise in U.S. exports in May reflected big gains for industrial supplies and materials and capital goods and smaller rises for autos and consumer goods.
A slight drop in the average price for imported oil to $76.93 per barrel helped keep the monthly trade gap from widening further. U.S. imports from Saudi Arabia and other members of the Organization of Petroleum Exporting Countries were down about 10 percent in May. U.S. financial markets mostly shrugged off the trade data. Stock index futures were little changed after the report. U.S. Treasury debt prices trimmed losses and the U.S. dollar rose slightly against the yen.
