US trade deficit narrows as exports hit record high

WASHINGTON, July 3 (Reuters): The US trade deficit narrowed a bit more than expected in May as exports jumped to a record high, suggesting trade could be less of a drag on second quarter growth than earlier feared.
The Commerce Department said on Thursday the trade gap fell 5.6 per cent to $44.4 billion. April's trade deficit was revised slightly down to $47.0 billion.
Economists polled by Reuters had expected the deficit to narrow to $45.0 billion in May from a previously reported $47.2 billion shortfall.
When adjusted for inflation, the deficit narrowed to $51.96 billion from $53.88 billion in April.
Trade subtracted 1.5 per centage points from first-quarter gross domestic product. The economy contracted at a 2.9 per cent annual pace in the first three months of the year.
In May, exports increased 1.0 per cent to a record high of $195.5 billion. Exports were driven by a surge in automobiles, parts and engines, which rose to a record high. Exports of consumer goods were also the highest on record.
Imports fell 0.3 per cent to $239.8 billion as petroleum imports tumbled to their lowest level since November 2010. Non-petroleum imports, however, hit a record high in May.
That points to an acceleration in domestic demand, which cannot be satisfied with locally produced goods, and is consistent with expectations of a rebound in growth in the second quarter.
The politically sensitive trade gap with China rose to $28.8 billion from $27.3 billion in April.
Top economies contract in first quarter of 2014: OECD
PARIS, July 3 (AFP): Leading global economies contracted in the first three months of 2014 as companies traded less and ordered fewer goods, and despite a slight rise in private consumption, the OECD said Thursday.
Data showed that economic activity contracted by 0.2 per cent overall in the first quarter of 2014 among the group's 34 members, compared with the last quarter of 2013.
The Organisation for Economic Cooperation and Development had recorded growth of 0.5 per cent in the previous quarter.
For the third quarter running, private consumption was the biggest contributor to business activity, posting an increase of 0.3 per cent in the first three months of this year, a statement said.
International trade trimmed the overall result by 0.1 per centage point meanwhile, while the drawing down of stocks led to the cut of another 0.2 per centage points.
Those two factors were particularly prevelant in the United States, the world's leading economy, where bad weather has been blamed in large part for an overall drop of 0.7 per cent in the three-month period.
In Japan, the third biggest global economy, consumption helped achieve overall growth of 1.6 per cent, but that was in part owing to purchases being moved up ahead of a sales tax increase in April.