The trade deficit in the U.S. widened in June as the strong dollar lifted imports and hobbled exports, representing a hurdle for economic growth.
The gap grew by 7.1 percent to $43.8 billion, the largest in three months, Commerce Department figures showed Wednesday in Washington. The median forecast in a Bloomberg survey of 67 economists called for a widening to $43 billion.
A firm dollar, which makes American goods relatively more expensive, and weak demand overseas are weighing on manufacturers and preventing the world’s largest economy from gaining momentum. At the same time, rising orders from U.S. customers, as evidenced by record imports from the European Union, are helping keep some trading partners afloat.
“Exports are still hurting from the combination of soft global growth and the stronger U.S. dollar,” said Richard Moody, chief economist at Regions Financial Corp. in Birmingham, Alabama, who correctly projected the shortfall. “Trade is going to continue to weigh on growth.”
Bloomberg survey estimates ranged from trade deficits of $40 billion to $46.7 billion.
The Commerce Department revised the May gap down to $40.9 billion from an initially reported $41.9 billion, which means the economy probably grew at a slightly faster pace in the second quarter than currently estimated.
The June reading was in line with an advance estimate issued last week, which was already incorporated into the gross domestic product figures.
Another report Wednesday showed slower employment gains in July. Companies added 185,000 workers to payrolls during the month, the fewest since April, according to ADP Research Institute. Economists projected a 215,000 advance.
Exports were little changed at $188.6 billion compared with $188.7 billion in May. Growing foreign demand for jewelry and other consumer products was offset by a slump in sales of capital goods such as telecommunications and medical equipment.
Imports climbed 1.2 percent to $232.4 billion from $229.7 billion in the prior month as Americans bought more pharmaceuticals, oil, automobiles and cellular telephones.
Europe was among the beneficiaries of growing U.S. demand as imports from the region grew to a record, swelling the trade gap between the two areas to the biggest in comparable data back to 1992.
After eliminating the influence of prices, which generates the numbers used to calculate gross domestic product, the total trade deficit widened to $59.3 billion compared with $57.6 billion in May.
The gap between exports and imports has hurt GDP this year, according to Commerce Department figures. It had little influence last quarter and subtracted 1.9 percentage points from growth in the first three months of the year, the most since 1985.
The strength in the dollar has made U.S. goods and services less attractive for overseas buyers. The greenback appreciated about 22 percent from June 2014 through Aug. 3 against a basket of major currencies.
Resilience in job growth should help maintain steady demand from U.S. consumers, lifting imports. Employers have added an average 208,300 positions a month this year compared with 259,700 in 2014 that was the best performance in 15 years. Economists surveyed by Bloomberg project 2015 will show a 220,000 average, according to a poll conducted July 2-8.
The economy probably added 225,000 to payrolls in July, according to estimates in the Bloomberg survey ahead of Friday’s Labor Department report.