US trade deficit jumps in May to highest level since 2022, Gap widens 0.8%

The gap in goods and services trade grew 0.8% from the prior month to $75.1, the widest since October 2022, Commerce Department data showed Wednesday. 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.

A widening of the trade deficit is expected to subtract from gross domestic product for a second straight quarter. Prior to 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 industrial supplies, aircraft and automobiles. Limited economic growth in overseas markets and a strong US dollar are restraining demand for US goods and services.

Meanwhile, the US 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.

Digging Deeper

• Travel exports — or spending by visitors to the US — 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 US 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