May Trade Deficit Insights

Yesterday's trade deficit +0.8% to $63.8B. Full Report

Inside the number: exports +2.4% to a record $118.7B, the biggest % gain since December 04.

Record petroleum imports due to record prices and the largest quantity in 18 months pushed up imports +1.8% to a record $182.5B. The non petroleum deficit fell to $43.2B, its lowest level in nine months.

The dollar value of imported petroleum +17% to a record $27.9B. Quantity of energy related petroleum imports +10.5% to a record 433.4M barrels. Average price +$4.92 to a record $61.74 per barrel, the largest monthly price increase since September 1990.

YTD YOY nominal imports +12.3%; Exports +12%. YTD deficit +12.8% to $317.9 billion. U.S. producers exported record values of services, foods and feeds, industrial supplies, capital goods and consumer goods. YTD exports to China are growing twice as fast as imports.

Exports are growing faster than expected and inflation adjusted imports are flat. This means GDP could come in higher than the 2.8% currently expected. More inflation pressure and higher interest rates would result. Really, do ya think?

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