Reuters reported that the U.S. trade deficit surged sharply in May due to a decline in exports, although falling imports suggest that trade could still lead a projected economic rebound in the second quarter.
The trade gap increased by 18.7 percent in May to $71.5 billion, according to data released Thursday by the Department of Commerce’s Economic Analysis Bureau.
April figures were revised to show the trade deficit fell to $60.3 billion, rather than the previously reported $61.6 billion.
Economists surveyed by Reuters had expected the deficit to rise to $71 billion.
The trade deficit subtracted a record 4.61 percentage points from GDP in the first quarter, explaining much of the annualized GDP contraction of 0.5 percent during that period.
A turnaround is expected in the second quarter, although the anticipated trade boost is likely to be partially offset by weak consumer spending.
President Donald Trump’s broad tariffs prompted businesses and households to bring forward imports and purchases of goods to avoid higher prices, clouding the economic outlook.
Economists warned it could take time for these distortions to clear from economic data.
The goods trade deficit increased by 13 percent in May to $97.5 billion.
Imports fell by 0.1 percent to $350.5 billion, with goods imports also declining by 0.1 percent to $277.7 billion.
Consumer goods imports dropped by $4 billion, driven by declines in other textile apparel and household goods, as well as toys, games, and sporting goods.
However, pharmaceutical preparations imports increased.
Industrial supplies and materials imports also declined, particularly finished metal shapes, but nuclear fuel materials imports rose.
Motor vehicle, parts, and engine imports increased by $3.4 billion, and capital goods imports rose by $300 million, driven by computers.
However, computer accessory imports decreased by $2.8 billion.
Service imports fell by $10 billion to $72.8 billion, due to declines in transportation and travel services, which offset increases in other business and maintenance and repair services.
Exports fell by 4 percent to $279 billion.
Goods exports dropped by 5.9 percent to $180.2 billion, led by a $10 billion decline in industrial supplies and materials, primarily non-monetary gold, natural gas, and finished metal shapes.
Equipment exports decreased by $1.9 billion as shipments of semiconductors, civil aircraft engines, and telecommunications equipment fell.
However, computer accessory exports increased, and consumer goods exports rose by $1.5 billion, driven by pharmaceutical preparations.