MW: May trade deficit jumps 10% as U.S. consumers snap up more imports
WASHINGTON (MarketWatch) — Higher oil prices and stronger demand by consumers for imports such as cell phones, sneakers and home furnishings boost the U.S. trade deficit in May by 10% to a three-month high.
The nation’s trade gap climbed $41.1 billion from a revised $37.4 billion in April, the government said Wednesday. Economists polled by MarketWatch had expected the trade gap of $40.2 billion.
Demand for a variety of consumer goods rebounded sharply, adding to evidence that American accelerated their spending in the second quarter after holding back earlier in the year. That’s another sign the economy grew faster in the spring.
Petroleum imports also surged as the cost of a barrel rose to the highest level of 2016.
As a result, U.S. imports increased 1.6% in May to a seasonally adjusted $223.5 billion the Commerce Department said.
U.S. exports, meanwhile, slipped 0.2% to $182.4 billion. Exports have been weak because of a strong dollar that makes American products more expensive as well as slower growth around the world. The U.S. exported fewer autos, airplanes and computer accessories in May.
Despite the higher trade gap, the U.S. deficit in the three months from March to April fell to lowest level since the start of 2014. A smaller deficit is a boost to U.S. growth as measured by gross domestic product.
The U.S. ran a trade deficit of $324 million with the United Kingdom in May after posting a $655 million surplus in April.
American exports to the U.K. fell by $1.2 billion to $4 billion one month ahead of the vote that resulted in Britain deciding to leave the European Union. Imports from the U.K. declined by $176 million to $4.3 billion.
The trade gap with China increased by $1.7 billion to an unadjusted $28.3 billion in May.
