U.S. Trade Deficit Shrinks in May
by:Tom Moeller
|in:Economy in Brief
Summary
- Decline reverses some of prior month’s widening.
- Exports ease but imports fall sharply.
- Goods trade deficit lessens; services surplus increases sharply.
The U.S. trade deficit in goods and services (BOP basis) fell to $69.0 billion in May from $74.4 billion in April, revised from $74.6 billion. A $68.8 billion deficit had been expected in the Action Economics Forecast Survey. Exports fell 0.8% (-3.2% y/y) following a 3.5% April decline, revised from -3.6%. Imports declined 2.3% in May (-6.8% y/y) after an unrevised 1.5% April gain.
The narrowing of the goods & services deficit in May reflected a shallower goods trade deficit of $91.3 billion compared to a $96.0 billion deficit in April. Goods exports fell 1.5% (-7.4% y/y) after a 5.2% decline. Imports of goods weakened 2.7% (-9.0% y/y) following a 2.0% increase. The services trade surplus improved to $22.3, its highest level since February 2021, from $21.6 billion. Exports of services edged 0.5% higher (6.6% y/y) after a 0.2% rise. Imports of services fell 0.5% (+3.8% y/y) in May after falling modestly in both of the prior two months.
The real (inflation-adjusted) goods trade deficit in May narrowed to $89.2 billion (chained 2012 dollars) from $96.2 billion in April. Real exports rose 1.2% (1.3% y/y) following a 5.8% decline while real imports were off 2.3% (-3.5% y/y) and reversed a 2.5% April rise.
The Customs value goods trade deficit narrowed to $91.9 billion in May after widening to $97.5 billion in April. Exports fell 0.9% (-7.9% y/y) following a 5.5% decline. Exports of food, feeds & beverages weakened 13.5% (-20.5% y/y). Auto exports rose 7.4% (14.9% y/y) while nonauto consumer goods exports increased 3.9% (2.3% y/y). Capital goods exports eased 0.2% (+3.7% y/y) while exports of industrial supplies and materials fell 2.5% (-21.7% y/y). Customs value imports declined 2.7% (-8.9% y/y) in May following a 2.2% April rise. The fall reflected a 5.9% decline (-21.9% y/y) industrial supplies & materials imports. Foods, feeds & beverage import fell 2.9% (-10.9% y/y). Auto imports improved 0.6% (11.3% y/y) but nonauto consumer goods import fell 7.2% (-16.5% y/y). Petroleum imports fell 0.3% (+0.3% y/y) in May while nonpetroleum imports declined 2.4% (-3.9% y/y).
The 0.5% May rise (6.6% y/y) in services exports reflected a 0.6% increase (24.8% y/y) in travel exports and a 0.2% increase (0.4% y/y) in financial services. Services imports eased 0.5% in May (+3.8% y/y) as travel imports fell 1.7% (+26.7% y/y), and transport services fell 1.9% (-17.6% y/y).
The goods trade deficit with China deepened to a seasonally adjusted $24.9 billion in May from $24.2 billion in April. Exports fell 21.3% (-12.8% y/y) while imports weakened 6.0% (-18.5% y/y). The goods trade deficit with the European Union narrowed to $16.5 billion in May from $17.3 billion in April. The trade shortfall with Japan narrowed to $5.0 billion from $6.8 billion in April.
The international trade data, including relevant data on oil prices, can be found in Haver's USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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