The U.S. trade deficit jumped 8.4% to $55.5 billion in May according to the latest figures from the Commerce Department. It is the biggest trade gap since December of last year.
The increase likely was driven by businesses building up inventories ahead of an increase in Chinese tariffs and a jump in auto imports from Mexico.
Economists surveyed by Reuters forecast a deficit of $54.0 billion in May.
The Commerce Department also revised the numbers for April to show a deficit of $51.2 billion, up from the $50.8 billion that was previously reported.
“Although slightly wider than expected, we have been already penciling in a slight drag on [the second quarter] real GDP from net exports,” economists at Citi Research said.
Imports of goods increased 4.0% to $217.0 billion. Imports of consumer goods rose $1.4 billion. Imports of automobiles and automobile parts jumped $2.3 billion to a record high.
Exports of goods rose 2.8% to $140.8 billion. Exports of consumer goods increased $0.8 billion and exports of soy beans rose $0.7 billion.
The trade deficit with China was $31.1 billion in May, a slight increase for the month. The deficit with Canada was $3.6 billion, up $1.8 billion. The deficit with the European Union was $16.9 billion in May, up $1.8 billion.
The U.S. recorded trade surpluses with South and Central America, Hong Kong, Singapore, Brazil, Saudi Arabia, and the United Kingdom.
The U.S. is still on pace to record a bigger trade deficit for 2019 year-over-year.
The deficit has swung wildly amid trade tensions between the U.S., China, and Europe.
The Trump administration has made the trade deficit with China a policy focus, but the gap continued to grow, with imports rising 12.8%.
Photo: Getty Images/Justin Sullivan