The numbers: The nation’s trade deficit in goods fell 2.2% in May to $104.3 billion, marking the second decline in a row after the gap hit a record high. The U.S. imported fewer food products, drinks and consumer electronics.
An early or advanced look at the trade gap in goods showed that it dropped from a revised $106.7 billion in April, according to Census Bureau figures.
The goods deficit had set a record high of $125.6 billion in March.
Last year, the U.S. posted the largest trade deficit ever. The goods deficit also topped $1 trillion for the very first time.
An advanced estimate of wholesale inventories, meanwhile, showed a 2% increase in May. Retail inventories rose 1.1%, according to an early estimate.
Big picture: The record U.S. trade earlier in the year has eased a bit during the spring and is likely to give a boost to gross domestic product, the official scorecard for the economy.
The increase in inventories could also spur Wall Street estimates to lift estimates for second-quarter GDP.
By contrast, a soaring deficit at the start of 2022 largely explained the 1.5% decline in GDP in the first quarter. It was the first drop in GDP since the onset of the pandemic.
High trade deficits aren’t going away, though. The U.S. is importing heavy quantities of consumer goods, industrial supplies and oil. Exports have also hit a record high, but they are growing more slowly.
Key details: U.S. imports dipped 0.1% to $280.9 billion in May. Lockdowns in China that delayed shipments of goods may have contributed to the second straight decline in imports.
Exports of American-made goods rose 1.2% in May to $176.6 billion — a new record. The U.S. exported more autos, consumer goods and industrial supplies.
The full trade report for May, which includes services such as tourism and travel, comes out next week.
Market reaction: The Dow Jones Industrial Average
DJIA,
-0.20%
and S&P 500
SPX,
-0.30%
were set to open higher in Tuesday trades.
