U.S. Trade Deficit Widened Further in May
by:Sandy Batten
|in:Economy in Brief
Summary
- Total monthly deficit widened to $75.1 bn from $74.5 bn in April.
- Both exports and imports declined slightly in May.
- Goods deficit widened to the largest since May 2022; services surplus widened to the largest since November 2019.
- Trade deficit on course to be another drag on GDP growth in Q2.
The U.S. trade deficit in goods and services (BOP basis) widened to $75.1 billion in May from a slightly revised $74.5 billion in April (previously $74.6 billion) according to the U.S. Census Bureau. The Action Economics Forecast Survey had expected a widening to $76.4 billion. Exports fell 0.7% m/m (+4.3% y/y) in May, offsetting a 0.7% monthly gain in April. Imports edged down 0.3% (+6.2% y/y) following a 2.3% monthly advance in April.
The goods deficit widened to $100.2 billion, the largest since May 2022 with goods exports falling 1.7% m/m and goods imports declining 0.8% m/m. The decline in goods exports was widely spread across end-use categories, led by a 3.4% m/m drop in exports of industrial supplies and materials and a 3.2% monthly decline in auto exports. Of the major categories, only nonfood consumer good exports excluding autos posted a monthly gain in May, up 1.5% m/m.
The services surplus widened to $25.1 billion in May, the largest surplus since November 2019, from $24.8 billion in April. Exports of services increased 1.3% m/m (+7.7% y/y) after a 0.2% monthly decline in April. Imports of services rose 1.3% m/m (+8.5% y/y) in May after monthly declines of 0.4% in both March and April. The monthly gain in service exports was widely spread, led by a 6.2% m/m advance in exports of maintenance and repair services and a 4.4% monthly increase in travel service exports. The monthly increase in service imports was also widely spread, led by a 3.0% m/m increase in transport service imports, a 1.6% m/m rise in imported insurance services, a 1.5% m/m gain in intellectual property imports, a 1.4% m/m rise in imported financial services and a 1.3% m/m advance in travel.
The real (inflation-adjusted) goods trade deficit (customs value, chained 2017 dollars) widened to $94.5 billion in May, the largest deficit since April 2023, from $94.0 billion in April. Real exports of goods fell 0.9% m/m after a 0.3% monthly increase in April. Real imports of goods declined 0.4% m/m following a 2.5% monthly gain in April. In the first quarter of this year, a widening of the trade deficit (net exports) subtracted 0.65% point from GDP growth. The widening of the deficit thus far in Q2 points to an even larger drag from trade in the current quarter.
The U.S. goods trade deficit with China widened to a seasonally adjusted $23.9 billion in May from $22.1 billion in April. Exports slumped 4.5% m/m while imports rose 3.8% m/m. The goods trade deficit with the European Union narrowed to $19.3 billion in May from $22.5 billion in April. The trade deficit with Japan widened to $6.3 billion in May from 5.8 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.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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