The trade deficit in the US probably shrank in June as cheaper oil reduced the import bill and slower global growth led to reduced demand for American-made goods, economists said before a report this week. The gap narrowed to $47.5 billion, the smallest in four months, from $48.7 billion in May, according to the median forecast of 59 economists surveyed by Bloomberg News before the Commerce Department issues the data on Aug. 9. Another report may show worker productivity rose and labor costs eased in the second quarter. Slowing economies in Europe and Asia means customers overseas may cut orders to American manufacturers, depriving the expansion of one of its mainstays. In the US, unemployment that’s exceeded 8 percent for 42 straight months may prompt consumers to slow purchases of goods made abroad. “Trade had definitely made an outsized contribution thus far in the economic cycle, but that phase is rapidly drawing to a close,” said Carl Riccadonna, a senior US economist at Deutsche Bank Securities Inc. in New York. “Global trade has been slowing. Imports are not booming by any stretch.” The strain on exports comes as countries in Europe teeter near recession and the Chinese expansion cools. The UK’s economy shrank 0.7 per cent in the second quarter, the most since 2009, a government report showed July 25. China’s growth slowed to the weakest pace since 2008, expanding 7.6 percent last quarter from a year earlier, the National Bureau of Statistics said July 13. Slower global economies help explain why shares of equipment makers have lagged behind the broader market. The Standard & Poor’s Supercomposite Machinery Index, which includes companies like Eaton Corp. and Deere & Co., has gained 3.5 per cent this year while the S&P 500 index has risen 11 per cent. “Our guidance for the full year really constitutes a recalibration of global growth prospects,” Eaton Chief Executive Officer Sandy Cutler said during a July 23 earnings call. “Global growth has clearly slowed, and the European and Chinese recovery, we think, has pushed out of 2012.” The Cleveland-based company projects its markets, including electrical, hydraulics, auto and aerospace parts, will expand 8 per cent in the US this year while dropping 1 percent in the rest of the world, Cutler said. On the other end of the trade ledger, retreating oil prices probably restrained the value of imports in June. The cost of imported petroleum decreased 11 per cent from the prior month, the biggest decline since December 2008, the Labour Department said July 12. Oil prices started to rebound in July and a sustained pickup may hurt consumers’ buying power. Brent crude on the ICE Futures Europe exchange in London rose as high as $109.13 a barrel on Aug. 3, up from a low this year of $88.49 on June 21. The cost of all imported goods rose 0.1 percent in July after falling 2.7 per cent the prior month, economists surveyed projected a Labour Department report on Aug. 10 will show. Imports may be limited as the US labour market struggles. The jobless rate unexpectedly rose to 8.3 per cent in July from 8.2 a month earlier, Labour Department figures showed Aug. 3. A 163,000 gain in payrolls followed a 64,000 increase in June. Federal Reserve officials “will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market,” according to an Aug. 1 statement from the Federal Open Market From:Gulftoday