The May US trade gap rose to a higher than expected $42.3 billion. That's the highest deficit since November 2008.

Official Release: PDF

Both exports and imports increased modestly from their April levels. Exports grew 2.4% while imports were up 2.9%.

Here's a look at both for the past few months:

Exports m/m: 2.4%, pr. -0.7% (Apr), 3.2% (Mar), 0.2% (Feb), Imports m/m: 2.9%, pr. -0.4% (Apr), 3.1% (Mar), 1.7% (Feb),

The higher imports can be taken as a good sign, in that it was not led by increases in energy prices but instead imports from China. Increased imports and a larger trade deficit for the US usually illustrates a growing economy as consumers spend more on foreign goods. Now, if the rise in imports was led by higher oil prices that would be a different story, but in May, oil prices (and volumes) actually declined (the US bill for crude oil fell to $21.54 billion from $22.69 billion).

While a larger deficit could be a sign that the US consumer is hungry for imports, it does reduce GDP a bit. In the 1st quarter trade subtracted 0.8 percentage points from GDP as imports outweighed exports. The trade gap with China expanded to $22.28 billion in May, the widest level since last October and a 15% gain on the previous month's bilateral deficit of $19.31 billion.

US exports meanwhile were up 2.4%, rising to a 20-month high of $152.25 billion. The increase was led by close to $2 billion in higher sales of capital goods - boosted by industrial machines and medicinal equipment. Exports of industrial supplies, consumer goods, and autos also helped to boost exports.

While there didn't seem to be an immediate impact on currency markets following the trade data, it does give some insight into the US economy for May, and with higher exports (good for US manufacturing) and stronger consumer spending, it could imply that the economy was slightly stronger in May than previously thought.