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

Imports $217 billion
Exports $140.8 billion

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.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

European Central Bank meeting

Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement on 24 October 2019.

  • 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

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

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.