US Trade Deficit Grows 10% in May

The US trade deficit grew by 10% in May as exports fell while imports, particularly from China, rose.

The Commerce Department said the trade deficit rose to $41.1bn (£31.7bn) in May compared with $37.4bn in April.

Exports decreased by 0.2%, while imports grew by 1.6%.

The US consistently runs a trade imbalance, importing more goods than it sells overseas, but as the dollar has strengthened, this has become more pronounced.

“Appreciation of the US dollar is weighing on the trade balance, making imports relatively inexpensive, while lowering the competitiveness of exports,” said Emily Mandel of Moody’s Analytics.

The deficit is particularly pronounced with China, where the gap rose by 19.4% to $29bn – the largest difference since November 2015.

The trade gap with the European Union also widened by 13.5%.

Industrial supplies and consumer goods were the leading imports for the US, while exports increased in the food and beverage sector.

Trade has been a hot-button topic in the US presidential election. Both of the presumptive candidates have raised questions about US trade deals and their impact on workers.

Despite what appears to be a big jump in the deficit, though, the figure is only slightly higher than the 2016 first-quarter average of $40.6bn.

via BBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza