The U.S. trade deficit rose for the second straight month in May as exports declined. Deficit rose by 0.8 percent to $75.1 billion, according to the Department of Commerce‘s Bureau of Economic Analysis. The bureau also revised April’s data to show a slightly lower trade deficit at $74.5 billion instead of $74.6 billion.
The U.S. goods trade deficit rose by 0.9 percent to $100.2 billion in May 2024, the highest in two years. Adjusted for inflation, the goods trade deficit rose 0.5 percent to $94.5 billion.
Exports decline
The commerce department attributes the expansion in the U.S. trade deficit mainly to the 0.7 percent decline in exports to $261.7 billion in May. The stronger dollar and slower global demand impacted exports in May as the Federal Reserve kept interest rates higher. Goods exports declined 1.7 percent to $169.6 billion. However, services exports rose $1.1 billion to $92.1 billion due to travel.
Trade impacted the U.S. gross domestic product (GDP) in the first quarter, restricting the economy to a 1.4 percent annual growth rate. In Q4 of 2023, the U.S. economy grew at a 3.4 percent pace. Growth estimates for Q2 of 2024 are now around 2 percent.
Read: South Korea’s semiconductor exports hit record high of $13.42 billion in June
Imports fall 0.3 percent
U.S. imports declined less than exports, contributing to a wider trade deficit. Imports declined 0.3 percent to $336.7 billion in May. Goods imports declined 0.8 percent to $269.7 billion, while imports of services increased $0.9 billion to $67 billion mainly due to transport and travel.
The U.S. saw a decline in imports of consumer goods, particularly due to pharmaceutical preparations. Meanwhile, imports of cell phones and other household goods increased by $1 billion.
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