Preview: Due June 27 - U.S. May Advance Goods Trade Balance - Deficit to correct lower within a deteriorating trend
We expect May’s advance goods trade deficit to fall to $95.6bn after increasing to $98.0bn in April. Trend in the deficit has been moving higher since August 2023 but April’s deterioration was sharper than trend and that makes a correction likely in May.
We expect exports to fall by 1.0% after a 1.5% increase in April while imports fall by 1.5% after a 3.1% increase in April. That export prices fell by more than import prices in May will restrain the narrowing in the deficit. Data from the Southern California ports suggests both exports and imports corrected from the stronger April outcomes.
Advance retail and wholesale inventory data will be released with the advance trade data, and all these indicators will contribute to Q2 GDP estimates. Unless the trade deficit corrects sharply lower, net exports look likely to be a negative in Q2 GDP.
