US trade deficit widens on oil costs

THE US trade deficit widened in April, but soaring oil prices were blamed for the deterioration and analysts see strong exports giving the weak economy continued support.

The US deficit in international trade of goods and services rose by 7.8 per cent to $US60.9 billion ($64.4 billion), the Commerce Department said. Wall Street expected a $US60.00 billion shortfall.

Trade has acted as a cushion for the sagging US economy, so the surge in the deficit could be seen as worrisome. However, analysts shunned extrapolating from a single number.

"Non-petroleum import growth is likely to remain subdued, owing to weak domestic demand, while export growth will remain well-supported due to a hyper-competitive US dollar and solid growth in many export markets," MFR analyst Joshua Shapiro said.

Trade is a component of gross domestic product, which is the measure of economic activity. Trade has boosted GDP for the last four quarters, adding 0.80 percentage point in the first three months of this year.