WASHINGTON — America’s trade deficit in goods took a dramatic turn upward in May, as businesses scrambled to bring in more imported products in an effort to get ahead of potential supply shortages and rising prices connected to the ongoing conflict in the Middle East.
According to data released Friday by the Commerce Department’s Census Bureau, the goods trade gap grew by 27.4%, reaching $105.8 billion for the month. That figure caught many analysts off guard — economists surveyed by Reuters had projected the deficit would come in around $85.0 billion.
Imports of goods climbed $10.9 billion to a total of $313.4 billion, while exports moved in the opposite direction, dropping $11.8 billion to $207.7 billion.
The widening deficit is significant because trade has already weighed on gross domestic product for two consecutive quarters. Current forecasts for second-quarter economic growth are clustering around a 2.5% annualized rate, though the new trade figures could push those estimates lower.
For context, the U.S. economy expanded at a 2.1% annualized pace in the most recent quarter, following a much slower 0.5% growth rate during the October through December period.
