The U.S. trade gap widened slightly less than expected in May to the highest level since late 2022, government data showed on Wednesday, as exports and imports eased.
The overall deficit widened to $75.1 billion, from a revised $74.5 billion in April, the Commerce Department said.
While that was the largest since October 2022, analysts had initially expected the gap to be the largest in two years.
Although US consumption has been resilient in the face of higher interest rates, domestic demand has lost steam and there have been concerns that export growth will weaken.
Exports fell more than imports in May, with outbound shipments totaling $261.7 billion — down $1.8 billion from April.
This came as exports of industrial supplies and materials fell by $2.1 billion.
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Imports were $1.2 billion less than April, at $336.7 billion, the report added.
Among sectors, imports of consumer goods fell by $2.0 billion — with declines in areas such as pharmaceuticals only partially offset by increases in cell phones and other household items.
Imports of autos and parts also fell by $1.5 billion, the Commerce Department said.
The U.S. goods deficit with China, a point of contention between the world’s two largest economies, widened by $1.9 billion to $23.9 billion in May.
“After nearly two years of positive growth, trade has been a significant drag,” said Matthew Martin, US economist at Oxford Economics.
“Although imports have risen evenly this year, exports have struggled amid a strong dollar and weak global demand, both of which will take time to abate,” he added.
However, he expects wage gains and easing inflation to help support growth this year.
Source: AFP