U.S. trade deficit widens as exports fall to lowest level since 2009
The U.S. trade deficit widened in May as the COVID-19 pandemic pushed tis exports to their lowest level since 2009, strengthening expectations the economy will contract in the second quarter at its steepest pace since the Great Depression.
The Commerce Department said on Thursday the trade deficit increased 9.7 percent to 54.6 billion U.S. dollars. Economists polled by Reuters had forecast the trade gap would widen to 53 billion U.S. dollars in May.
Exports tumbled 4.4 percent to 144.5 billion U.S. dollars, the lowest since November 2009. Goods exports plunged 5.8 percent to 90.0 billion U.S. dollars, the lowest since August 2009.
Travel restrictions weighed on exports of services, which fell to 54.5 billion U.S. dollars, the lowest since December 2011.
Imports slipped 0.9 percent to 199.1 billion U.S. dollars, the lowest since July 2010. Goods imports fell 0.8 percent to 166.0 billion U.S. dollars, the lowest since September 2010.
Declining imports have led businesses to draw down on inventories, which will contribute to sinking gross domestic product in the second quarter.
The Atlanta Federal Reserve is forecasting that GDP will plunge at a record 36.8 percent annualized rate in the April-June quarter. The economy contracted at a 5.0 percent rate in the first quarter, the sharpest decline since the 2007-2009 recession.
(Cover: A shopkeeper works inside his retail store as the phase one reopening of New York City continues during the outbreak of the coronavirus disease (COVID-19) in the Brooklyn borough of New York City, New York, U.S. June 9, 2020. /Reuters)