May US trade deficit surges 8.4% to $55.5 billion
The US trade deficit grew to a five-month high in May.
The US trade deficit increased by 8.4%, according to the US Commerce Department. The trade deficit was higher than April’s upwardly revised $50.2 billion. The US trade deficit had the highest growth in imports since 2015.
US trade deficit:key figures
US trade deficit grows with rise in imports before US-China tariff conflict
May imports increased by 4% to $217 billion because of an increase in importing crude oil, cell phones, cars, and computers. The US trade gap with China grew to $30.2 billion. Imports from China likely grew as businesses placed orders from the Asian nation right before US President, Donald Trump, imposed additional tariffs on Chinese goods. Imports of consumer goods increased by $1.4 billion. Auto and car part imports grew to a record high of $2.3 billion.
Exports rose 2.8% to $140.8 billion. The US exported more soybeans, vehicles, and passenger planes than it imported. Aircraft exports rose by $0.5 billion, despite Boeing grounding its MAX 737 plane after two fatal plane crashes.
What do financial experts say about the May US trade deficit?
Citi Research Economists predict that US Q2 gross domestic product ( GDP) will drop because of the US trade deficit.
‘Although slightly wider than expected, we have been already penciling in a slight drag on [the second quarter] real GDP from net exports,’ said the economists.
Andrew Hunter, senior US economist at Capital Economics, also believes that US Q2 GDP will decline as the US-China trade imbalance remains.
‘We [Capital Economics] still think it is slightly more likely than not that the trade dispute with China will ultimately escalate further. Trade is likely to remain a modest drag on growth over the second half of this year, which we expect to compound a sharp slowdown in domestic demand growth,’ said Hunter.
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
Be ready to act on ECB opportunities
Learn how the ECB’s monetary policy announcements affect interest rates and price stability ahead of its next meeting in September 2020.
- How might the next meeting affect the markets?
- What are the key rate decisions to watch?
- Why is the Governing Council announcement important for traders?
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.