US May Trade Deficit Smallest in 1-1/2 Years

The US trade deficit narrowed sharply to USD 43.1 billion in May 2018 from a revised USD 46.1 billion in the previous month and below market expectations of USD 43.7 billion. It was the smallest trade gap since October 2016.

Exports of goods and services from the US rose USD 4.1 billion from the previous month, or 1.9 percent, to a record USD 215.3 billion in May. Goods exports increased USD 3.7 billion to USD 144.9 billion, mainly driven by higher sales of soybeans (up USD 2.0 billion) and civilian aircraft (up USD 1.9 billion). Exports of industrial supplies and materials, however, slumped USD 1.3 billion, due to a decline in sales of other petroleum products (down USD 0.9 billion). Exports of services increased USD 0.4 billion to USD 70.4 billion in May.

Imports of goods and services to the US increased USD 1.1 billion, or 0.4 percent, to USD 258.4 billion in May. Goods imports rose USD 1.1 billion to USD 210.7 billion, due to higher purchases of capital goods (up USD 2.1 billion), such as telecommunications equipment, computers, civilian aircraft parts and civilian aircraft engines. By contrast, imports of pharmaceutical preparations dropped USD 0.6 billion. Imports of services decreased USD 0.1 billion to USD 47.7 billion.

The politically sensitive goods deficit with China surged 18.7 percent to USD 33.2 billion in May (vs USD 28.0 billion in April). Also, the trade gap with Mexico rose 18.8 percent to USD 6.7 billion (vs 5.7 billion in April) and that with Canada jumped 86.2 percent to USD 1.5 billion (vs USD 0.8 billion). Meanwhile, the trade deficit narrowed with the EU (USD 13.4 billion vs USD 14.6 billion) and with Japan (USD 5.5 billion vs USD 6.3 billion).

On a non-seasonally adjusted basis, exports rose to Japan (5.9 percent), Canada (4.4 percent), the EU (4.3 percent), China (3.3 percent) and Mexico (1.2 percent). Imports grew from China (14.6 percent), Canada (6.9 percent) and Mexico (4.8 percent), but fell from Japan (-3.7 percent) and the EU (-0.2 percent).

US May Trade Deficit Smallest in 1-1/2 Years

BEA | Joana Ferreira |
7/6/2018 1:08:36 PM