U.S. Trade Deficit Deepens Slightly

The U.S. foreign trade deficit in goods and services during May grew to $41.9 billion from $40.7 billion in April, revised from $40.9 billion. A deficit of $42.0 billion had been expected in the Action Economics Forecast Survey. In constant dollars, the trade deficit in goods deepened to $58.4 billion from $56.9 billion. Real exports of goods eased 1.9% (-0.5% y/y) while real goods imports declined 0.5% (+3.7% y/y). During all of the second quarter, deterioration in the foreign trade deficit subtracted 1.9 percentage points from real GDP growth, the most since early-1985.

Imports eased 0.1% (-3.7% y/y) following a 3.3% decline in April. Nonpetroleum goods imports fell 0.2% (+1.9% y/y) as foods, feeds & beverages imports fell 3.5% (-2.5% y/y). Capital goods imports were off 1.5% (+0.4% y/y) and industrial supplies & materials imports also fell 1.5% (-27.6% y/y). Automotive vehicles & parts imports rose 3.0% (3.0% y/y) but nonauto consumer goods imports were unchanged (+2.3% y/y). Imports of services gained 0.3% (3.3% y/y) as travel imports nudged 0.2% higher (4.4% y/y).

Petroleum imports fell 0.5% in May (-45.8% y/y) after a 1.3% rise. In constant dollars, petroleum imports declined 4.0% (-2.6% y/y). The average per barrel cost of crude oil improved to $50.76 (-47.2% y/y). The value of energy-related petroleum product imports slipped 0.6% (-47.1% y/y) as their quantity declined 10.0% (-5.1% y/y).

Overall exports eased 0.8% (-4.4% y/y) as goods exports were off 1.3% (-7.5% y/y). Capital goods exports retreated 5.2% (-2.9% y/y). Exports of industrial supplies & materials rose 2.2% (-11.8% y/y) and auto exports gained 0.8% (-6.7% y/y). Foods, feeds & beverage exports increased 1.7% (-10.4% y/y) but consumer goods exports eased another 0.5% (-4.3% y/y). Services exports improved 0.2% (1.5% y/y) as travel exports gained 0.3% (1.1% y/y).

By country, the trade deficit in goods with China deepened m/m to $30.5 billion. Exports fell 5.0% y/y while imports rose 3.0% y/y. The deficit with Japan lessened significantly m/m to $5.3 billion. Exports eased 0.4% y/y but imports gained 2.0% y/y. The trade deficit with the European Union was little-changed m/m at $12.5 billion. Exports slipped 0.8% y/y and imports declined 2.5% y/y.

The international trade data can be found in Haver's USECON database. Detailed figures are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey, which is carried in the AS1REPNA.