The US trade deficit widened in May to the largest since 2022 as a decline in exports of merchandise exceeded a drop in imports.

The gap in goods and services trade grew 0.8% from the prior month to US$75.1 billion , the widest since October 2022, Commerce Department data showed Wednesday. The median estimate in a Bloomberg survey of economists called for a US$76.5 billion deficit.

The value of goods and services exports decreased 0.7%, while imports fell 0.3%. The figures aren’t adjusted for inflation.

A widening of the trade deficit is expected to subtract from gross domestic product for a second straight quarter. Prior to the latest results, the Federal Reserve Bank of Atlanta’s GDPNow forecast showed trade subtracting nearly a percentage point from second-quarter growth.

A drop in shipments of goods to overseas customers to the lowest since November was led by a decline in the value of aircraft and automobiles. Limited economic growth in overseas markets and a strong US dollar are restraining demand for US goods and services.

Meanwhile, the US appetite for imported merchandise may continue to cool amid restrained consumer spending and a recent pickup in retail inventories. Imports of goods fell 0.4% in May, the trade report showed.

On an inflation-adjusted basis, the merchandise trade deficit widened to US$94.5 billion in May, the largest in more than a year.

  - Bloomberg