U.S. trade deficit expands for 2nd consecutive month in May

Posted on July 5, 2024   |  

The U.S. trade deficit grew for the 2nd month in May due to declining exports, impacting economic growth in Q2.

The goods trade deficit rose by 0.9% to $100.2 billion, the highest since May 2022, and increased by 0.5% to $94.5 billion after inflation adjustment.

Trade lowered GDP growth in Q1 to a 1.4% annualized rate, down from 3.4% in Q4 of the previous year. Q2 growth is estimated at 2%.

Exports decreased by 0.7% to $261.7 billion in May, affected by a strong dollar and weaker global demand.

Goods exports fell by 1.7% to $169.6 billion, with significant drops in industrial supplies, nonmonetary gold, other petroleum products, and fuel oil. Automotive exports also decreased.

Services exports rose by $1.1 billion to $92.1 billion, mainly due to travel.

Imports fell by 0.3% to $336.7 billion, with goods imports down by 0.8% to $269.7 billion. There were declines in consumer goods imports, especially pharmaceuticals, although imports of cell phones and other household goods increased by $1.0 billion.

Automotive imports fell by $1.5 billion, while imports of industrial supplies and materials rose by $1.4 billion, driven by crude oil and nuclear fuel materials. Services imports increased by $0.9 billion to $67.0 billion, due to higher transport and travel.