US trade deficit widens modestly in May

WASHINGTON: The US trade deficit widened modestly in May as exports fell more than imports amid a slowing global economy, the Commerce Department reported Tuesday.
The trade gap increased to $41.9 billion in May, up from a revised $40.7 billion in April, but less than the $42.5 billion expected in analyst forecasts.
Exports fell 0.8 percent in May to $188.6 billion, reflecting a sharp drop in goods exports, including civilian aircraft. That was marginally offset by a small rise in exports of services.
Imports fell 0.1 percent to $230.5 billion, dragged lower by a decline in goods imports such as drilling and oilfield equipment and industrial supplies.
Analysts said the report suggested the US trade picture was returning to normal after volatility caused by a West Coast ports strike that ended in February, allowing a massive backlog of exports and imports to flow again.
"The data are consistent with net exports being close to neutral for GDP in Q2, following a huge 1.9-point drag on the growth rate in Q1," said Jim O´Sullivan, chief US economist at High Frequency Economics.
Nevertheless, US trade overall slowed in the first five months of the year from the same period in 2014, as the world´s largest economy encounters trouble selling to a slowing global economy and the strong dollar hampers exports.
Imports over the five-month period fell 2.1 percent to $1.18 trillion while exports dropped 2.7 percent to $943 billion.
That left the trade deficit 0.5 percent higher year over year.
With US crude oil production booming, the country´s petroleum-based trade deficit continued to decline in May, falling to $5.8 billion as petroleum exports rose for the second straight month.
By region, the politically sensitive goods trade gap with China rose to $30.6 billion in May from $27.5 billion in April. The US has long criticized China for keeping its yuan currency undervalued to gain an unfair trade advantage.
The goods deficit with the 28-nation European Union increased to $13.4 billion from $11.9 billion in April.