The U.S. trade deficit widened in May as rising oil prices pushed imports to an all-time high, outstripping record exports, a government report showed on Thursday.

A separate weekly report showed the number of Americans applying for first-time jobless benefits fell more than expected, suggesting continued labor market strength.

The May trade shortfall widened 2.3 percent to $60 billion from a revised $58.7 billion in April, the Commerce Department said.

Imports increased 2.3 percent, reaching $192.1 billion, as the oil import bill swelled to $19 billion, its highest level since September.

Average prices for crude oil imports rose more than $2 a barrel in May to $59.36, an eight-month high, and imports from the Organization of Petroleum Exporting Countries jumped almost 10 percent to a record $14.6 billion.

This is not a good month but it's not the worst month of the year either. We are still on track for improvement in the trade gap this year, said Kurt Karl, chief U.S. economist at Swiss Re in New York.

The May trade gap matched the median estimate of Wall Street analysts surveyed before the report and the data had little impact on financial markets.


Overall goods and services exports rose 2.2 percent, led by strong civilian aircraft and other capital goods shipments and record exports of consumer goods.

Economists are hopeful rising exports and business spending will keep the U.S. economy on solid ground, even as a slump in the U.S. housing market and high gasoline prices appear to be tempering consumer spending.

Foreign trade is making an important contribution to growth, cushioning the impact of the continuing housing downturn and the recent weakening in consumer spending growth, said Nigel Gault, U.S. economist at Global Insight.

U.S. home foreclosures fell in June from a 30-month peak in May, but default rates are expected to rise as homeowners with adjustable rate mortgages face higher payments in coming months, real estate data firm RealtyTrac said on Thursday.

Retailers reported modest June sales on Thursday, as industry leader Wal-Mart Stores Inc. and teen favorite Abercrombie & Fitch Co. topped Wall Street's conservative expectations.

A weaker U.S. dollar and robust growth abroad have supported U.S. exports of late, helping to narrow the U.S. trade gap on an annual basis and boost domestic growth.

In the first five months of the year, the deficit stood at $295.5 billion, below $317.8 billion in the same period last year. In 2006, the trade gap hit a record $758.5 billion.

Also Thursday, the Labor Department said the number of U.S. workers applying for jobless benefits fell 12,000 to a seasonally adjusted 308,000, a level that suggests the job market remains solid.

These trade and jobless numbers are not out of line with what we have been seeing. The economy is growing, and it is growing modestly. We had a good month or so, said Robert Lutts, president and chief investment officer at Cabot Money Management in Salem, Massachusetts.

(Additional reporting by Joanne Morrison in Washington and Julie Haviv, Nicole Maestri and Pedro Nicolaci da Costa in New York)