By Harriet Torry 

WASHINGTON -- The U.S. trade deficit widened in May as both exports and imports declined amid weak global demand caused by continued coronavirus-related disruptions.

The foreign-trade gap in goods and services expanded 9.7% from the prior month to a seasonally adjusted $54.6 billion in May, the Commerce Department said Thursday.

Economists surveyed by The Wall Street Journal had expected a deficit of $53.0 billion.

Imports decreased 0.9% in May to $199.1 billion. Exports, meanwhile, fell 4.4% to $144.5 billion. Exports of goods were the lowest since August 2009, the Commerce Department said.

The U.S. usually runs a deficit in goods and a surplus in services such as medical care, higher education, royalties and payments processing. The services surplus shrank in May to its lowest level since February 2016 as borders remained closed.

Trade has been volatile in recent months as the pandemic closed factories and businesses around the world and disrupted supply chains.

Year to date, the goods and services deficit decreased 9.1% from the same period in 2019. Exports to the European Union in May were the lowest since January 2006.

The International Monetary Fund last week downgraded its forecasts for the global economy this year, as countries made less progress than expected curbing the pandemic and salvaging businesses. The IMF expects the global economy will shrink 4.9% this year, compared with its April estimate of a 3% decline.

Dow Inc. finance chief, Howard Ungerleider, last week described the second quarter as "a mixed bag" for the materials science company during a virtual conference, with diverging demand patterns in regions with worsening coronavirus outbreaks.

Some companies are more optimistic.

"We believe we've passed the trough of the economic impacts of the pandemic in most countries around the world," said Ray Young, chief financial officer at Chicago-based agricultural company Archer Daniels Midland Co., at a virtual conference in mid-June.

"My viewpoint is that U.S.-China trade, we still believe this is on track. We're expecting the fourth quarter to be a very strong quarter for our U.S. agricultural exports in soft commodities, particularly soybeans into China," he said.

Beijing has committed to boosting its purchases of U.S. agricultural and manufactured goods, energy and services by $200 billion over two years as part of a preliminary trade agreement.

The U.S. deficit in goods with China widened to a seasonally adjusted $27.9 billion in May, Thursday's report showed. Year to date, the goods deficit with China is nearly 25% narrower than in the same period of 2019.

A trade deficit subtracts from the calculation of gross-domestic-product growth. The data for May, the middle month of the second quarter, suggest trade will be a drag on growth for the quarter as a whole.

Write to Harriet Torry at


(END) Dow Jones Newswires

July 02, 2020 09:25 ET (13:25 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.