US trade deficit widens to $45 bn in May
The US trade deficit increased more than expected in May as imports surged and exports fell, official data released Wednesday showed.
The trade gap widened to $45.0 billion, up from a revised $40.1 billion in April, the Commerce Department reported.
It was the sharpest one-month increase in the US trade shortfall in more than two years,and the largest single-month deficit since November.
Analysts had expected the deficit to grow for a second consecutive month, but to a smaller $40.8 billion.
The US exported $187.1 billion in goods and services and posted imports of $232.1 billion.
In May, exports were $0.5 billion less than in April, while imports increased $4.4 billion.
The deficit was $1.2 billion lower than May 2012.
The three-month moving average deficit $40.8 billion, compared with $40.4 billion for the period ending in April.
Imports of automobiles and parts hit a record $26.0 billion, up 3.2 percent from April, while imports of food and beverages jumped 4.2 percent to $9.9 billion.
Crude oil imports, which account for about 10 percent of the country's imports, also weighed on the deficit, rising 3.2 percent to $22 billion.
At the same time, US exports were notably weakened by a 1.0 percent fall in food product exports to their lowest level in nearly three years, at $9.9 billion.
US petroleum product exports also declined, by 2.3 percent to $4.1 billion.
"This report makes it harder to see where the GDP acceleration comes from that the Fed is looking for," said Robert Brusca of FAO Economics.
The Federal Reserve has signaled it would begin to wind down bond purchases if the economy continued to improve. But economic growth was at a tepid annual rate of 1.8 percent in the first quarter and data has been mixed for the second quarter.
The political sensitive trade gap with China ballooned by 15.7 percent in May to $27.9 billion.
The Obama administration has been pushing China to adopt a less export-dependent economic model and allow its yuan currency to appreciate. Critics say Beijing keeps the yuan undervalued to gain an unfair trade advantage.
The US trade gap with the European Union, by contrast, fell 13 percent to $10.8 billion.
The US and EU are set to begin trade negotiations in July aimed at creating one of the world's largest free-trade blocs.