The numbers: The nation’s trade deficit in goods fell 2.2% in May to $104.3 billion, a second straight decline that could give a lift to gross domestic product in the second quarter.
The trade gap in goods fell from $106.7 billion in April and a record $125.6 billion in March, Census Bureau figures show.
An advanced estimate of wholesale inventories, meanwhile, showed a 2% increase in May. Retail inventories rose 1.1% in the month, according to an early estimate.
Big picture: The record U.S. trade earlier in the year has eased a bit during the spring and is likely to give a boost to GDP, the official scorecard for the economy.
The rise in inventories could also spur Wall Street to lift GDP forecasts. When businesses produce more and restock it adds to economic growth.
By contrast, a soaring deficit at the start of 2022 largely explained the 1.5% decline in GDP in the first quarter. It was the first drop in GDP since the onset of the pandemic.
High trade deficits aren’t going away, though. Last year, the U.S. posted the largest trade deficit ever. The goods deficit also topped $1 trillion for the very first time.
The U.S. is importing heavy quantities of consumer goods, industrial supplies and foreign oil. Exports have also hit a record high, but they are growing more slowly.
Key details: Imports dipped 0.1% to $280.9 billion in May. The U.S. imported fewer food products, drinks and consumer electronics.
Lockdowns in China that delayed shipments of goods may have contributed to the second straight decline in imports.
Exports of American-made goods rose 1.2% in May to $176.6 billion — a new record. The U.S. exported more autos, consumer goods and industrial supplies.
The full trade report for May, which includes services such as tourism and travel, comes out next week.
Looking ahead: “Trade subtracted from growth in the first quarter of this year, but with the sizeable decline in the nominal goods deficit in April and May, trade will contribute to economic growth in the second quarter,” said senior economist Abbey Omodunbi of PNC Financial Services.