The U.S. trade deficit narrowed for the second straight month in May, as a decrease in goods spending by American households held down import growth while exports of energy products increased.
The trade gap in goods and services shrank 1.3% in May from the previous month to $85.5 billion, the Commerce Department said Thursday, down from April’s revised $86.7 billion.
Imports rose 0.6% to $341.4 billion, driven by a rise in crude oil imports. Exports rose 1.2% to $255.9 billion due to increased exports of crude oil and natural gas.
Imports of consumer goods fell $1.5 billion as a result of Americans’ cooling appetite for goods purchases.
After splurging on furniture, electronics and appliances during the pandemic-induced lockdowns, many households are now shifting their spending to services such as restaurants or travel. Higher consumer prices are also making goods less attractive to consumers.
At the same time, supply-chain disruptions caused businesses to stockpile orders, which has left them with full inventories and no room to store new products.
Consumer spending on goods fell a seasonally adjusted 0.7% in May from the previous month, the first decline this year, the Commerce Department reported last week. Services spending was up 0.7%.
Russia’s invasion of Ukraine has disrupted global energy and food markets, driving up the price of many commodities this spring. Countries in Europe have also sought to shift energy purchases away from Russia.
Prices for oil, wheat and soybeans eased in June, raising hopes of cooling inflation pressures.
Federal Reserve officials will likely be encouraged by falling imports. The Fed has embarked on an aggressive path of rate increases designed to cool demand in the economy and bring inflation under control. Speaking at a conference last week, Fed Chairman
Jerome Powell
said the goal was to reduce consumption “so that supply can catch up.”
Write to David Harrison at david.harrison@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
The U.S. trade deficit narrowed for the second straight month in May, as a decrease in goods spending by American households held down import growth while exports of energy products increased.
The trade gap in goods and services shrank 1.3% in May from the previous month to $85.5 billion, the Commerce Department said Thursday, down from April’s revised $86.7 billion.
Imports rose 0.6% to $341.4 billion, driven by a rise in crude oil imports. Exports rose 1.2% to $255.9 billion due to increased exports of crude oil and natural gas.
Imports of consumer goods fell $1.5 billion as a result of Americans’ cooling appetite for goods purchases.
After splurging on furniture, electronics and appliances during the pandemic-induced lockdowns, many households are now shifting their spending to services such as restaurants or travel. Higher consumer prices are also making goods less attractive to consumers.
At the same time, supply-chain disruptions caused businesses to stockpile orders, which has left them with full inventories and no room to store new products.
Consumer spending on goods fell a seasonally adjusted 0.7% in May from the previous month, the first decline this year, the Commerce Department reported last week. Services spending was up 0.7%.
Russia’s invasion of Ukraine has disrupted global energy and food markets, driving up the price of many commodities this spring. Countries in Europe have also sought to shift energy purchases away from Russia.
Prices for oil, wheat and soybeans eased in June, raising hopes of cooling inflation pressures.
Federal Reserve officials will likely be encouraged by falling imports. The Fed has embarked on an aggressive path of rate increases designed to cool demand in the economy and bring inflation under control. Speaking at a conference last week, Fed Chairman
Jerome Powell
said the goal was to reduce consumption “so that supply can catch up.”
Write to David Harrison at david.harrison@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8