Trade deficit
Recent numbers show the U.S. trade deficit worsening. Capital Economics

The U.S. imported $45 billion more than it exported in May in the latest piece of evidence that the nation’s economy may not achieve even a 2 percent rate of growth in gross domestic product (GDP).

The Commerce Department's Bureau of Economic Analysis said Wednesday that total May exports of $187.1 billion and imports of $232.1 billion resulted in a goods and services deficit of $45 billion, up from a revised $40.1 billion for April. May exports were $500 million less than April exports of $187.6 billion; May imports were $4.4 billion more than April imports of $227.7 billion.

“The sharp widening in the international trade deficit in May suggests that second-quarter annualized gross domestic product growth may be even weaker than the 1.5 percent we have been expecting,” said Paul Dales, senior U.S. economist for Capital Economics. “At the same time, the improvement in the ADP employment survey in June may not necessarily be reflected in Friday’s release of the official payrolls figures.”

He said the real trade deficit actually widened to $52.3 billion from $47.4 billion and that even after allowing for a partial reversal in June, this could mean that net trade subtracted around 1 percentage point from second-quarter annualized GDP growth.

“We had been expecting a more modest drag, of around 0.4 percentage points,” he said.

In May, the goods deficit increased $5 billion from April to $63.4 billion, and the services surplus increased $0.2 billion from April to $18.4 billion. Exports of goods decreased $9 million to $130.3 billion, and imports of goods increased $4.2 billion to $193.7 billion.

Exports of services increased $0.4 billion to $56.8 billion, and imports of services increased $2 million to $38.4 billion.

The goods and services deficit decreased $1.2 billion from May 2012 to May 2013. Exports were up $2.8 billion, or 1.5 percent, and imports were up $1.6 billion, or 0.7 percent.

The April-to-May decrease in exports of goods reflected decreases in consumer goods ($1.2 billion); industrial supplies and materials ($0.9 billion); and foods, feeds and beverages ($100 million). Increases occurred in capital goods ($8 million); automotive vehicles, parts and engines ($300 million); and other goods ($200 million).

The April-to-May increase in imports of goods reflected increases in industrial supplies and materials ($1 billion); consumer goods ($1 billion); automotive vehicles, parts and engines ($800 million); other goods ($500 million); foods, feeds and beverages ($400 million); and capital goods ($300 million).

Exports of goods were virtually unchanged from May 2012 to May 2013. Decreases occurred in foods, feeds and beverages ($1.7 billion) and industrial supplies and materials ($1 billion). Increases occurred in automotive vehicles, parts and engines ($900 million); other goods ($6 million); consumer goods ($6 million); and capital goods ($5 million).

The May 2012 to May 2013 increase in imports of goods reflected increases in consumer goods ($2 billion); automotive vehicles, parts and engines ($1.3 billion); other goods ($900 illion); and foods, feeds and beverages ($800 million). Decreases occurred in industrial supplies and materials ($3.9 billion) and capital goods ($1.1 billion).

Exports of services increased $0.4 billion from April to May. The increase was mostly accounted for by increases in other private services ($200 million), which includes items such as business, professional and technical services, insurance services, and financial services, and in passenger fares ($100 million). Changes in the other categories of services exports were relatively small.

Imports of services increased $200 million from April to May. The increase was mostly accounted for by increases in passenger fares ($100 million) and in travel ($100 million).