The U.S. trade deficit widened to the highest level in 18 months in May as imports and exports alike bounced back after declines in April, government data showed Tuesday.
The deficit, the difference between the nation's exports and imports, reached $42.3 billion in May from $40.3 billion U.S. in April, the Commerce Department said.
It marked the largest trade gap since November 2008. The one-month worsening in the deficit is the biggest since February.
Imports for May rose 2.9% to $194.5 billion U.S., the highest level since October 2008 after a slight fall in April.
Exports also increased, growing by 2.4% to $152.3 billion U.S. -- the highest level since September 2008. Exports had also declined in April.
The widening of the deficit confounded expectations. Analysts surveyed by MarketWatch had expected the May gap to narrow to $38.8 billion U.S.
Many analysts had pinned their estimates on lower petroleum imports, which did decline but not sufficiently so to make a dent.
The larger-than-expected trade gap may cause economists to reduce their forecasts for second-quarter gross domestic product. A worsening trade gap is a drag on growth.
The government will release its first GDP estimate for the second quarter of 2010 at the end on July. Prior to the trade data, economists had penciled in a 3.0% annualized growth rate for the April-through-June quarter.
Net exports subtracted eight-10ths of a percentage point from U.S. GDP growth for the first quarter.
In real terms, which exclude price changes, imports rose 2.9% in May. Exports rose 2.3%. In real terms, the deficit widened by 4.2%.
For the first five months of the year, the deficit totaled $197.8 billion U.S., well above the $143.7-billion-U.S. level in the same period last year.
Imports of goods alone rose 3.1% during May to $161.7 billion U.S. The largest gain came from imports of consumer goods and cars.
Automobile imports rose 12.8% on the month.
Exports of goods alone rose 2.8%, hitting $107.2 billion in May. This also marked the highest since September 2008.
Exports of civilian aircraft increased 1.7% in May.
The petroleum deficit narrowed 10.9% in May to $21.5 billion.
The value of U.S. crude-oil imports fell to $21.5 billion U.S. in May from $22.7 billion U.S. in April as the price of a barrel of oil fell to $76.93 U.S. from $77.13 U.S. in the previous month. The quantity of crude imports dropped to 280 million barrels from 294 million in April.
The U.S. trade deficit with China widened to $22.28 billion U.S. in May from $17.48 billion U.S. in the same month last year, putting the gap at the highest level since October 2009. The deficit was wider than the $19.31-billion-U.S. gap in April.
Imports from India were the highest on record in May. The Obama administration has been seeking stronger trade ties with India.
The trade gap with Mexico was the highest since May 2008.
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