The U.S. trade deficit in goods increased in May amid a decline in exports, but an ebbing inflow of imports likely positions trade to make a big contribution to gross domestic product in the second quarter.
The goods trade gap widened 11.1% to $96.6 billion last month, the Commerce Department's Census Bureau said on Thursday. Exports of goods dropped $9.7 billion to $179.2 billion. Goods imports were little changed at $275.8 billion.
A flood of imports as businesses rushed to bring in goods before President Donald Trump's sweeping tariffs came into effect boosted the goods trade deficit to a record high in the first quarter, accounting for much of the 0.5% annualized rate of decline in GDP during that period.
The Atlanta Federal Reserve is forecasting GDP accelerating at a 3.4% rate this quarter. Given the gyrations from imports, economists cautioned against interpreting the anticipated bounce back in GDP as a sign of economic strength.
Data on retail sales, the housing and labor markets have suggested economic activity is softening.