US Trade Deficit Widens 42.2% to $77.6 Billion in May

The United States Department of Commerce reported that the national trade deficit widened by 42.2% to $77.6 billion in May. The gap rose from a revised $54.6 billion in April, though the final figure was slightly lower than economist forecasts of $78.5 billion to $78.7 billion.

Imports rose 3.3% to $395.3 billion, with capital goods reaching a record $128.0 billion due to an artificial intelligence investment boom. Exports fell 3.2% to $317.7 billion, despite record petroleum shipments linked to Middle East conflicts. The goods deficit surged to $106.5 billion, while the services surplus saw a modest increase to $28.9 billion.

Specific data released by the Census Bureau and Bureau of Economic Analysis highlighted a $4.1 billion goods trade deficit with India, signaling India's growing role as a supplier of pharmaceuticals to the American market. The U.S. continues to maintain larger deficits with China, Mexico, and Vietnam.

Trade has acted as a drag on gross domestic product for two consecutive quarters. Consequently, the Federal Reserve Bank of Atlanta forecasts a second-quarter GDP growth rate of 1.2%.