U.S. Trade Deficit Widens More Than Expected Amid Steep Drop In Exports
05:47, 2nd July 2020
(RTTNews) - With the value of exports falling by much more than the value of imports, the Commerce Department released a report on Thursday showing the U.S. trade deficit widened more than expected in the month of May.
The Commerce Department said the trade deficit widened to $54.6 billion in May from a revised $49.8 billion in April.
Economists had expected the trade deficit to widen to $53.0 billion from the $49.4 billion originally reported for the previous month.
The wider than expected trade deficit came as the value of exports plunged by 4.4 percent to $144.5 billion in May from $151.1 billion in April.
Exports of industrial supplies and materials led the way lower, tumbling by $3.9 billion, while export of services also slumped by $1.1 billion.
Meanwhile, the report showed a more modest decrease in the value of imports, which slid by 0.9 percent to $199.1 billion in May from $200.9 billion in April.
A steep drop in imports of automotive vehicles, parts and engines was partly offset by increases in imports of industrial supplies and materials and consumer goods.
"With the recovery in production lagging consumption by a few weeks, both exports and imports will begin rebounding soon," Michael Pearce, Senior U.S. Economist at Capital Economics, predicted.
The report also said the goods deficit widened to $76.1 billion in May from $71.8 billion in April, while the services surplus fell to $21.5 billion from $22.1 billion.
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