The U.S. Census Bureau said Wednesday an early look at the U.S. trade deficit in May–excluding services–indicates it fell by 1.8% to $65.9 billion. The lower trade deficit could translate into a bump for gross domestic product (GDP).
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.9% on June 26, according to the Atlanta Federal Reserve.
The government will officially release trade data in full for May next week. However, the size of the trade deficit is generally associated with changes in exports and imports.
The Census Bureau said exports of consumer goods, which have been very weak, shot up by 6.0% in May to $16.8 billion. Exports of vehicles, which also have been weak, rose 4.8% to $13.2 billion, while rxports of capital goods ticked down 0.4% to $43.4 billion. The latter is an indication of weakness in global business investment.
Total exports of goods rose 0.4% to $127.1 billion, while total imports of goods fell 0.4% to $193.0 billion.
Imports of consumer goods were down 3.8% to $49.4 billion after coming in far more than expected. Imports of vehicles fell 2.4% to $29.2 billion and, in a very positive sign for domestic business investment, imports of capital goods increased 2.3% to $52.7 billion.