The widening U.S. trade deficit surprised analysts last week by reaching a level not seen since October 2008, while the decline in exports added to growing evidence of a global economic slowdown.
The U.S. Commerce Department announced last Thursday that the trade gap grew 4.4%, to $53.1 billion from $50.8 billion in May. Economists had expected it to shrink to $48 billion.
Although both exports and imports declined, economists viewed the drop in exports as another sign of trouble for the global economy, which in turn will exert more stress on the struggling U.S. recovery.
The bad news means the government will need to revise second-quarter gross-domestic product (GDP) downward by about half.
"It appears that one of the last fully functioning engines of growth may be faltering," economist Gregory Daco at IHS Global Insight wrote in a note to clients.
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