U.S. Trade Deficit Widened in May as Both Exports, Imports Fell -- Update
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
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
"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
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 email@example.com
(END) Dow Jones Newswires
July 02, 2020 09:25 ET (13:25 GMT)
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