Car exports cut US trade deficit

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The US trade deficit narrowed to a four-month low in June, as strong car and agricultural exports offset a jump in the cost of crude oil imports.

The trade deficit shrank to $58.1bn (£29bn) during June, a 1.7% decrease from May's revised figure of $59.2bn.

The narrowing of the gap surprised analysts, who had predicted a slight widening because of higher oil costs.

However, separate figures showed energy costs pushed US producer prices up by more than expected in July.

US producer prices rose 0.6% last month, according to figures from the Labor Department. When food and energy costs were stripped out, however, producer prices increased by just 0.1% on the month.

Fresh records

Both US exports and imports set record highs in June, the Commerce Department said.

Exports of both goods and services rose by 1.5% to $134.5bn, while imports totalled $192.7bn.

America's politically sensitive trade deficit with China rose by 5.7% from May to $21.2bn in June, the largest imbalance since January.

The increasing deficit with China has angered some US politicians, who accuse China of artificially setting the yuan too low to give Chinese exporters an unfair advantage.