The U.S. trade gap expanded significantly in May after imports climbed across several major product categories, pushing the nation’s goods trade deficit to its highest level in 14 months, according to advance data released on June by the U.S. Department of Commerce. The latest figures showed businesses increased purchases of foreign-made products, resulting in a wider imbalance between imported and exported goods during the month.
The Commerce Department reported that the advance goods trade deficit increased to $96.6 billion in May from a revised $87.0 billion in April. Goods imports rose by 3.8% to $290.5 billion, while goods exports increased by 0.6% to $193.9 billion. The larger increase in imports outpaced export growth, producing the widest monthly goods deficit since March 2025.
The preliminary trade report offered one of the first detailed indicators of U.S. economic activity for May and will contribute to estimates for second-quarter gross domestic product. Economists monitor the monthly goods trade balance because net exports are one of the major components used in calculating GDP, alongside consumer spending, business investment, and government expenditures.
The increase in imports covered several categories, including consumer goods, industrial supplies, automotive products, and capital equipment. Businesses also reported higher inbound shipments of products used in manufacturing and commercial operations. Export growth was more modest during the same period, limiting the ability of overseas sales to offset the stronger pace of imports.
Commerce data points to broad-based import growth
Advance trade statistics released by the Census Bureau, part of the Commerce Department, showed imports of consumer goods recorded one of the largest monthly increases. Businesses also brought in more industrial supplies and materials, reflecting continued purchasing activity by manufacturers and distributors.
Imports of capital goods also increased during May. This category includes machinery, equipment, and technology products frequently purchased by companies for production and operational purposes. Automotive imports likewise contributed to the monthly gain, adding to the overall rise in inbound shipments.
At the same time, exports registered a comparatively smaller increase. Shipments of American-made goods rose modestly across several categories but did not match the pace of import growth. Because the goods trade balance measures the difference between exports and imports, stronger inbound demand combined with slower export expansion resulted in a wider deficit.
The advance report covers only trade in physical goods and does not include services such as financial activities, travel, transportation, intellectual property, or professional services. The complete international trade report, which combines goods and services data, is scheduled for release by the Commerce Department in early July.
Inventory data published alongside the trade figures also showed wholesale inventories increased by 0.2% in May, while retail inventories excluding motor vehicles edged up by 0.3%. Those figures are also incorporated into quarterly GDP calculations because they measure changes in business stock levels.
Trade figures become key input for second-quarter GDP estimates
The May trade data arrived as economists continued updating forecasts for second-quarter economic growth. Monthly reports covering trade, inventories, manufacturing activity, consumer spending, and inflation are used to refine estimates before the Bureau of Economic Analysis publishes its advance GDP report.
A larger trade deficit generally reduces GDP because imports are subtracted when calculating domestic economic output, while exports contribute positively. However, economists typically evaluate trade figures alongside inventory accumulation and domestic demand before determining the overall impact on quarterly growth.
Some analysts noted that stronger imports may also indicate continued business purchasing activity, particularly when companies acquire machinery, production equipment, industrial materials, or consumer merchandise ahead of future sales. Inventory increases reported during May could partially offset the effect of the wider trade deficit in GDP calculations, depending on how those goods are used or stored during the quarter.
The May report follows several months of changing trade patterns influenced by purchasing decisions made earlier in the year. Import volumes have fluctuated as businesses adjusted sourcing schedules, managed inventories, and responded to changing delivery timelines across global supply chains.
Commerce Department data showed the increase in imports extended across multiple industries rather than being concentrated in a single sector. That broader distribution suggests businesses in manufacturing, wholesale trade, retail, and transportation all contributed to higher import activity during the month.
Exports continue to post modest monthly gains
While imports recorded a notable increase during May, exports also moved higher, although at a considerably slower pace. Advance Census Bureau data showed U.S. goods exports reached $193.9 billion, representing a monthly increase of 0.6%. The smaller rise meant export growth was insufficient to offset the stronger expansion in inbound shipments.
Exports of industrial supplies, capital goods, agricultural products, and manufactured items contribute significantly to overall U.S. goods trade, but monthly performance varies according to international demand, production schedules, transportation capacity, and seasonal factors. The advance report did not indicate unusually large increases in any single export category that would materially narrow the monthly deficit.
Because the report measures merchandise trade rather than services, sectors such as finance, technology licensing, business consulting, travel, and transportation are excluded from the advance estimates. Those industries are included in the comprehensive international trade report released each month, providing a broader picture of the nation’s external trade position.
The monthly advance release is widely monitored by economists because it offers an early indication of how international trade may influence broader economic performance before complete trade statistics become available. Government agencies, financial institutions, manufacturers, logistics providers, and retailers routinely review the report when assessing commercial activity.
The Commerce Department’s preliminary figures may also be revised when additional customs documentation and reporting information become available.
