The Commerce Department reported on Thursday that U.S. trade with the rest of the world decreased in May, with both imports and exports declining. This drop in imports was particularly significant, reaching its lowest level since December 2021, which may indicate a slowdown in consumer demand.
Key Points from the Commerce Department Report
The following are key takeaways from the report on U.S. import and export trends. It’s worth noting that these trade figures are not adjusted for inflation and therefore reflect changes in demand and price:
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Imports: In May, imports declined by 2.3% compared to the prior month, reaching a seasonally adjusted value of $316.08 billion. This decrease mainly resulted from lower shipments of industrial supplies, as well as consumer goods like cell phones and toys. Notably, consumer spending on goods in the U.S. experienced a sharp decline in May due to rising borrowing costs and historically high inflation levels.
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Exports: Exports also faced a decline of 0.8% in May, reaching a total value of $247.1 billion. This decrease was driven by reduced shipments of soybeans, natural gas, and oil.
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Trade Gap: The trade gap, which indicates the difference between U.S. imports and exports, narrowed by 7.3% in May compared to April. The deficit decreased from $74.44 billion to $68.98 billion during this period.
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Surge in Service Exports: May witnessed an increase in service exports, particularly as international travelers made trips to the U.S. This surge in service exports led to the highest services surplus since February 2021.
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Year-to-Date Deficit Decrease: According to the Commerce Department, the goods and services deficit through May of this year decreased by 22.8% compared to the same period in 2022.
