The larger-than-expected deficit signals potential downgrades to Q2 GDP growth estimates as imports outpaced exports.
The US advance goods trade deficit expanded to $105.8 billion in May, exceeding the $85.0 billion forecast and marking the widest gap since July 2025. The figure reflects a $5.6 billion increase in goods imports to $302.1 billion, outpacing a $8.5 billion rise in exports to a record $219.7 billion.
April’s deficit had narrowed to $82.4 billion from $85.3 billion in March, continuing a stabilization trend after 2025’s tariff-driven distortions. Capital goods and consumer goods led export gains, while imports were driven by capital goods and foods, offsetting declines in industrial supplies and vehicles.
The report is expected to prompt downgrades to Q2 GDP nowcasts, which were already revised lower ahead of the release. The advance goods trade balance is a key input for early GDP estimates due to its outsized impact on monthly volatility.