US trade deficit narrows unexpectedly as exports continue to climb

America's shortfall in its trade on goods with the rest of the world shrank last month as exports continued to climb.

The US trade deficit in goods fell in May by 3.7% month-on-month to reach $64.8bn.

Economists had anticipated a reading of -$68.9bn.

Sales of goods abroad rose by $2.9bn versus April to reach $143.6bn, while American purchases from overseas edged higher by $0.4bn to $208.4bn.

"The advance goods trade report for May, also released today, suggests that net trade is on course to make an even bigger contribution to second-quarter GDP growth than we previously assumed," said Andrew Hunter at Capital Economics.

"That would see net trade add more than 1%-pt to second-quarter GDP growth which, given the recent strength of consumer spending, we now expect to be as strong as 4.5% annualised."

On a related note, at the broker's Mid-year 2018 Outlook event held earlier on the same day, in London, Chris Beauchamp at IG highlighted record US goods and services exports as one of the factors behind his positive view on the country's economy and American stocks more generally.