US trade deficit unexpectedly jumps in May

America´s shortfall in trade with the rest of the world registered an unexpected increase in May as imports rose but sales overseas slipped a tad.

The total US trade deficit in goods and services worsened by 10.1% month-on-month to reach $41.1bn, according to the Department of Commerce, its highest since August 2015.

Economists had been expecting a gap of $40.0bn.

Exports dipped 0.2% month-on-month to $182.4bn amid less demand for aircraft and computers.

However, Americans sourced more goods and sevrices from abroad a month before the Brexit vote, boosting imports by 1.6% month-on-month to $223.5bn - a three-month-high - to reach $223.5bn.

The US´s petroleum deficit declined to $2.9bn in May, the least since February 1999.

In parallel, the bilateral trade deficit with the People´s Republic of China increased 19.4% to stand at $29bn.

"The resulting $4.3B deterioration in the core deficit easily offset the combined $0.7B improvement in the oil and aircraft accounts. The monthly numbers are wildly volatile but we have to reduce our estimate of the net trade contribution to Q2 GDP growth to just +0.1%, from +0.5%. We're now looking for growth of 2-3/4%, but note that the June advance data will be released the day before the GDP report so our estimate of the trade contribution could change markedly.

"Either way, the rebound in the ISM export orders index in recent months points to much better trade numbers in the second half of the year," analysts at Pantheon Macroeconomics said in a research report sent to clients.