Washington, DC, July 13--Stronger demand for U.S. products overseas helped to reduce the trade deficit in May, the Commerce Department said Wednesday.
The trade deficit narrowed 2.8% in May to $55.3 billion. The deficit has stabilized after setting a record $60.1 billion in February.
As a result economists expect net exports to start contributing positively to GDP in the second quarter. The trade gap subtracted 0.6 percentage points from first quarter growth.
The trade deficit was below the consensus forecast of Wall Street economists of a deficit of $57.0 billion.
The trade deficit in April was revised slightly lower to $56.9 billion from the initial estimate of $57 billion.
Exports rose to a new record, while imports slipped in the month.
Exports rose 0.2% to a record $106.9 billion in May. Imports fell 0.9% to $162.2 billion.
Exports of agricultural products, consumer goods and industrial supplies increased in May.
The increase in exports is impressive in part because it came despite a drop in exports of civilian aircraft. Exports in this volatile sector fell 28.4% to $2.3 billion.
Imports of goods alone fell 1.2% to $135.3 billion. The decline in imports was led by industrial supplies, primarily crude oil, and capital goods.
Imports of consumer goods remained strong in May, rising 0.7% to $34.0 billion.
The petroleum deficit narrowed 8.7% to $15.8 billion, the lowest level since January. Some of this may be due to the lower price of imported oil. The average price per barrel of oil fell to $43.08 in May from a record $44.76 in April.
The U.S. imported 318.6 million barrels of crude oil in May, or 10.3 million barrels per day, up from 313.8 million in April.
The U.S. trade deficit with China widened to $15.8 billion in May compared with $12.2 billion in the same month last year and $14.7 billion in April.
In a separate report, the Labor Department said import prices rose in June on a rebound in crude oil prices.
