U.S. Trade Deficit Widens In May As Exports Slump
(RTTNews) - A report released by the Commerce Department on Thursday showed the U.S. trade deficit widened in the month of May amid a steep drop by the value of exports.
The Commerce Department said the trade deficit climbed to $71.5 billion in May from a revised $60.3 billion in April.
Economists had expected the trade deficit to increase to $71.0 billion from the $61.6 billion originally reported for the previous month.
The wider trade deficit came as the value of exports tumbled by 4.0 percent to $279.0 billion in May after surging by 3.4 percent to $290.6 billion in April.
The report showed a steep drop in exports of industrial supplies and materials as well as a decrease in exports of capital goods, while exports of consumer goods increased.
Meanwhile, the Commerce Department said the value of imports edged down by 0.1 percent to $350.5 billion in May after plummeting by 16.4 percent to $350.8 billion in April.
A notable decrease in imports of consumer goods was largely offset by a jump in imports of automotive vehicles, parts, and engines.
"Compared to Q1 levels, imports are down meaningfully, implying a major GDP contribution from trade of more than 3ppts," said Bernard Yaros, Lead U.S. Economist at Oxford Economics.
He added, "That said, the true health of the economy will be better distilled by the consumer and business spending figures, which are showing signs of weakness."
The report also said the goods deficit widened to $97.5 billion in May from $86.3 billion in April, while the services surplus edged down to $26.0 billion in May from $26.1 billion in April.
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