U.S. Goods & Services Trade Deficit (May)

The U.S. goods & services trade deficit widened in May, but the $41.9 bln gap was smaller than expected. In real terms, the shortfall grew a bit, although for the quarter to date, it is a bit smaller than the prior quarter. What that means is that real GDP should get a little bit of support not a huge amount, though from net trade in Q2.

"May exports fell 0.8% (-1.9% in real terms), the first setback since February, even as the greenback lost a little ground. Imports slipped as well, for the 2nd month in a row", notes BMO Economics.

Interesting, considering that auto parts imports jumped 3.0% to a record $29.5 bln. Consumer goods imports excluding autos were, however, flat, as imports for most other categories fell: for food, feeds & beverages, capital goods ex autos, and industrial supplies & materials. In other words, this suggests that consumer spending was all auto-related, says BMO Economics.