CHART OF THE DAY: THE TRADE DEFICIT
Via the Cleveland Fed:
“The nominal trade deficit unexpectedly widened in May, as an increase in imports outweighed a slightly more modest rise in exports. The $1.9 billion widening, which follows a $0.3 billion widening in April, brings the deficit to an 18-month high of $43.3 billion. Despite a 9.1 percent drop in imports of petroleum, total imports rose 2.9 percent, led by consumer goods, automotive vehicles, and capital goods. While the decrease in net exports will likely lop off a few tenths off of real GDP growth in the second quarter, the sharp increase in non-petroleum imports suggests that domestic spending is continuing to recover. The report also provides tentative evidence that the strengthening of the dollar has not hindered US exports yet, as exports climbed 2.4 percent in May. The 12-month growth rates of imports and exports increased to 29.1 percent and 21.0 percent, respectively.”
