US trade deficit widens in May as exports struggle – HDR | Hickory Daily

In May, the drop in imports came as purchases from China rose 9.5 percent.

Exports to the United States declined 0.3% and Canada’s trade surplus with its neighbour to the south narrowed to $2.12 billion.

“Unless we get another massively positive jobs report on Friday, there’s a good chance Governor (Stephen) Poloz will cut rates at next week’s policy meeting”. The economy relied more on export-led industries such as manufacturing early in the recovery, but growth is increasingly coming from domestic drivers like construction and services as the economic cycle matures. The deficit has been highly volatile so far this year, ranging from $37.25 billion in February to $50.57 billion in March, but the year-to-date average of $42.57 billion in 2015 is almost identical to the $42.36 billion average observed in all of 2014.

“The data are consistent with net exports being close to neutral for GDP in Q2, following a huge 1.9-point drag on the growth rate in Q1”, said Jim O’Sullivan, chief U.S. economist at High Frequency Economics. The central bank is widely expected to cut its economic outlook, but what happens with its key interest rate is less certain.

Imports of goods decreased $0.4 billion to $189.2 billion, driven by a decrease in imports of capital goods and industrial supplies.

Exports of goods to Germany fell 6.0 percent in May from the prior month, according to non-seasonally adjusted figures.

May imports fell 0.1 percent to $230.5 billion.

Exports fell $1.5 billion, or 0.8 percent, to $188.6 billion in May, led by a drop in overseas sales of U.S.-made capital goods.

The USA trade gap with the European Union – which is in talks with the United States over another massive trade deal – increased $1.4 billion to $13.4 billion in May.

Exports of aircraft and other transportation equipment and parts rose 10.3 per cent to $2.1 billion, while motor vehicles and parts gained 2.7 per cent to $6.9 billion.

Energy product exports increased 1.3% as a rise in refined petroleum energy products was tempered by a decline in exports of crude oil and bitumen.