The trade deficit grew a little wider in May, resulting from declines in exports of American aircraft and other manufactured products. The nation’s shortfall rose to 2.9 percent or a seasonally adjusted $41.9 billion, according to the Department of Commerce.
Exports suffered because of a strong dollar, making purchasing American goods with foreign currencies more expensive. This is particularly true in vital markets such as the European Union and China, both of whose economies are struggling. The Greek debt crisis has shaken Europe and China is contending with the looming fears of a stock-market crash.
The volatility of the U.S. trade deficit has Federal Reserve officials keeping an eye on the global economy as they consider raising the benchmark interest rate for the first time since 2008. While there remains worldwide economic uncertainty, the U.S. has seen a slowdown in inflation, a growing jobs market and home prices leveling. These factors should keep mortgage rates affordable in a historical context. The current conforming no point 30-year fixed rates average 4.125 percent and 15-year rates average 3.25 percent.
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