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

WASHINGTON D.C. : The U.S. International Trade deficit widened 0.8% in May to $75.1 billion, the Commerce Department said Wednesday. It is the largest deficit since October 2022. Economists surveyed by The Wall Street Journal had predicted the deficit would widen to a seasonally adjusted $76.3 billion.

Both exports and imports fell in May, with exports falling slightly more. Exports of industrial supplies and fuel oil dropped in May. Exports were down 0.7% to $261.7 billion, led by industrial supplies and autos.

Imports dropped 0.3% to $336.7 billion in May. Consumer goods imports dropped $2 billion and auto imports also declined. Year to date, the trade deficit increased $14.4 billion or 4.2% from the same period last year.

Adjusted for inflation, the deficit widened to $94.2 billion from $87.4 billion in the first quarter, suggesting the trade sector will be a drag on growth in the second quarter, said Rubeela Farooqi, Chief U.S. economist at High Frequency Economics.

Manyy economists think this effect will moderate as the year progresses as consumer appetite for imports wane.