The US trade deficit widened sharply in May as exports fell, but subsiding imports suggested trade could still lead an anticipated rebound in economic growth in the second quarter.
The trade gap increased 18.7 per cent to $71.5 billion in May, the Commerce Department’s Bureau of Economic Analysis said yesterday.
Data for April was revised to show the trade deficit narrowed to $60.3bn rather than the previously reported $61.6bn. Economists polled by Reuters forecast the deficit would rise to $71bn.
The trade deficit chopped off a record 4.61 percentage points from gross domestic product in the first quarter, accounting for much of the 0.5pc annualised pace of decline in GDP during that period. A reversal is expected in the second quarter, though the anticipated boost from trade is likely to be partially offset by tepid consumer spending. President Donald Trump’s sweeping tariffs, which have led businesses and households to front-load imports and goods purchases to avoid higher prices from duties, have muddled the economic picture. Economists warned it could take time for the tariff-related distortions to wash out of the economic data.
The goods trade deficit increased 13pc to $97.5bn in May. Imports dipped 0.1pc to $350.5bn. Goods imports also eased 0.1pc to $277.7bn. Consumer goods imports decreased by $4bn, pulled down by declines in other textile apparel and household goods as well as toys, games and sporting goods. But imports of pharmaceutical preparations increased.
There were also decreases in imports of industrial supplies and materials, mostly reflecting finished metal shapes, but imports of nuclear fuel materials rose. Imports of motor vehicles, parts and engines increased $3.4bn. Exports fell 4pc to $279bn. Goods exports dropped 5.9pc to $180.2bn.
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