The U.S. trade deficit widened in May by the most in nearly a year as exports fell and a pickup in domestic demand led to more imports of consumer goods and industrial materials.
The gap grew by 10.1%, the most since August 2015, to $41.1 billion from the prior month, Commerce Department figures showed July 6. The median forecast in a Bloomberg News survey of economists called for a $40 billion shortfall.
American companies imported more cars, mobile phones, apparel and industrial supplies as the world’s largest economy started to strengthen after a first-quarter lull. At the same time, overseas sales of U.S. goods face hurdles such as weak global markets, with Britain’s vote to leave the European Union clouding the outlook.
“The re-acceleration in imports is in line with a firming in consumer spending in the second quarter,” said Gregory Daco, head of U.S. macroeconomics at Oxford Economics in New York. “We’re continuing to see overall weakness in the export picture. That’s a combination of a stronger currency and more importantly, a sluggish overseas growth environment.”
The U.S. merchandise trade deficit with the EU jumped 12.8% to $13.4 billion in May, a month before Brexit. U.S. goods exports to the region fell 4.2%.
The good news in the report was that the U.S. petroleum deficit fell to $2.9 billion in May, the smallest since February 1999. Oil prices rose $4.71 a barrel during the month, according to the Commerce Department, the biggest advance in five years.
“There’s been a regime change in the oil import-export situation,” said Tom Simons, a money-market economist at Jefferies in New York. “The benefits are going to play out for years.”
Bloomberg survey estimates for the May trade deficit ranged from $37.4 billion to $42 billion after a $37.4 billion April shortfall.
Exports decreased 0.2% to $182.4 billion on less demand for aircraft, computers, industrial machines and auto parts, the Commerce Department data showed.
Imports climbed 1.6% to $223.5 billion. While shipments of goods made overseas rose to a three-month high, imported services climbed to the highest on record.
After eliminating the influence of prices, which renders the numbers used to calculate gross domestic product, the trade deficit expanded to a three-month high of $61.1 billion from $57.5 billion.
Revised data released on June 28 showed the first-quarter trade gap actually narrowed rather than widened as previously estimated. Net exports added 0.12 percentage point to GDP from January through March, after being a drag in the previous two quarters.
The May report also showed the merchandise trade gap with China, the world’s second-biggest economy, widened 19.4% to $29 billion.