US Trade Deficit Widens to Largest Since 2022
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The U.S. trade deficit widened in May to the largest since 2022 as a decline in exports of merchandise exceeded a drop in imports.
The gap in goods and services trade grew 0.8% from the prior month to $75.1 billion, the widest since October 2022, Commerce Department data showed July 3.
The median estimate in a Bloomberg survey of economists called for a $76.5 billion deficit.
The value of goods and services exports decreased 0.7%, while imports fell 0.3%.
The figures aren’t adjusted for inflation.
Digging Deeper
- Travel exports — or spending by visitors to the U.S. — climbed to $18.1 billion, a fresh record.
- Travel imports — a measure of Americans traveling abroad — rose for the first time in three months.
- The U.S. merchandise-trade deficit with China grew to $23.9 billion. The value of goods imported from China rose.
- The goods shortfall with Mexico also widened to the largest in three months
A widening of the trade deficit is expected to subtract from gross domestic product for a second straight quarter.
Before the latest results, the Federal Reserve Bank of Atlanta’s GDPNow forecast showed trade subtracting nearly a percentage point from second-quarter growth.
A drop in shipments of goods to overseas customers to the lowest since November was led by a decline in the value of aircraft and automobiles.
Limited economic growth in overseas markets and a strong U.S. dollar are restraining demand for U.S. goods and services.
Meanwhile, the U.S. appetite for imported merchandise may continue to cool amid restrained consumer spending and a recent pickup in retail inventories. Imports of goods fell 0.4% in May, the trade report showed.
On an inflation-adjusted basis, the merchandise trade deficit widened to $94.5 billion in May, the largest in more than a year.
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