WASHINGTON, Jul 2 (Reuters) – The United States’ trade deficit widened in May when the COVID-19 pandemic brought exports to their lowest level since 2009, strengthening expectations that the economy will contract in the second quarter to its strongest pace since the Great Depression.
The Commerce Department said Thursday that the trade deficit increased 9.7% to $ 54.6 billion. Economists polled by Reuters had forecast that the trade gap would widen to $ 53 billion in May.
Exports fell 4.4% to $ 144.5 billion, the lowest since November 2009. Goods exports fell 5.8% to $ 90.0 billion, the lowest since August 2009.
Travel restrictions weighed on service exports, which fell to $ 54.5 billion, the lowest since December 2011.
Imports fell 0.9% to $ 199.1 billion, the lowest since July 2010. Goods imports fell 0.8% to $ 166.0 billion, the lowest since September 2010.
The decrease in imports has led companies to reduce inventories, which will help sink gross domestic product in the second quarter.
The Atlanta Federal Reserve forecasts that GDP will fall at a record annualized rate of 36.8% in the April-June quarter. The economy contracted at a rate of 5.0% in the first quarter, the largest decline since the 2007-2009 recession. (Report by Lucia Mutikani Edited by Paul Simao)
