The coronavirus pandemic caused the United States trade deficit to widen in May as both exports and imports fell, the Commerce Department said yesterday.
Exports declined from the prior month by 4.4 per cent to US$144.5 billion, the weakest since November 2009, the department said.
May's decline amounted to a almost $469 million drop in exports, which are down $897 million from this time previous year.
Compared to 2018, exports are down more than $1.26 billion as businesses deal with the economic fallout of the global coronavirus pandemic.
"Overall, the narrowing in the trade deficit is welcome, but with exports and imports still both down by roughly one-third from a year ago, this is only the first baby step along the road to recovery", Paul Ashworth, chief North America economist at Capital Economics, said in a report. But it ran a $21.5 billion surplus, smallest since February 2016, in the trade of services such as banking and education.
Imports dropped 6% to $27.7 billion as consumption goods fell 14% or $1.233 billion thanks to the shutdown of retailing and wholesaling activities.
However, year-on-year, both exports and imports are still well down from pre-pandemic levels.
Exports to China, however, are a different story as exports have been up every month except April.
Year‐to‐date, the goods and services deficit decreased $22.3 billion, or 9.1 percent, from the same period in 2019.
The ABS said the value of exports had dropped more than 15% or $6.4 billion from March ($42.15 billion) to $35.74 billion in May.
Dow Inc. finance chief, Howard Ungerleider, last week described the second quarter as "a mixed bag" for the materials science company during a virtual conference, with diverging demand patterns in regions with worsening coronavirus outbreaks. Still, on a year-over-year basis, exports fell 34.1%. The 25% decline in May was the 18 best "growth" rate in May.
Beijing has committed to boosting its purchases of US agricultural and manufactured goods, energy and services by $200 billion over two years as part of a preliminary trade agreement.