In May, the United States saw its goods trade deficit expand to its highest level in over a year, driven by a decline in exports and a rise in imports.
Figures released by the Commerce Department on Friday show the goods trade deficit for May widened by 27.4% from the previous month to $105.8 billion. This data is not adjusted for inflation. The median estimate in a Bloomberg survey of economists was for an $85 billion deficit.
US goods exports fell by 5.4% in May, dragged down by declines across several categories, including a drop in exports of industrial supplies. This category encompasses crude oil and petroleum products. Imports for the same period increased by 3.6%.
In April of this year, US crude oil exports had surged to a record high as conflict in the Middle East severely disrupted trade flows. This month, with progress in peace talks easing tensions, shipping traffic through the Strait of Hormuz has recovered, and oil prices have retreated. High shipping costs are also leading Asian fuel producers to reduce their imports of US crude.
The report indicates that exports of both consumer goods and capital goods saw significant declines.
At the same time, the US has been importing equipment in recent months to advance data center construction. The latest data shows imports of capital goods continued to rise in May. This category includes computers and peripherals, semiconductors, and telecommunications equipment. Compared to the same period last year, capital goods imports have increased by nearly 42%.
Recent purchasing managers' surveys indicate that as supply chain delays become more widespread, businesses are continuing to stockpile goods and raw materials, heightening concerns about further price increases.
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