Kiplinger’s Economic Outlooks are written by the staff of our weekly Kiplinger Letter and are unavailable elsewhere. Click here for a free issue of The Kiplinger Letter or to subscribe for the latest trends and forecasts from our highly experienced Kiplinger Letter team.
The trade deficit expanded in May as both imports and exports weakened. The U.S. trade deficit in goods and services rose to a seasonally adjusted $71.5 billion, from a downwardly revised $60.3 billion in April. The main driver of the expansion was an $11.6 billion drop in exports.
The trade deficit is a measure of the difference between what the United States buys from foreign nations and what the country sells overseas. Year-to-date, exports have increased 5.5%, while imports have increased 14.8% from the same period a year ago. The White House’s trade policy has set monthly trade figures on a rocky course in 2025. While softening economic activity in advanced economies will weigh on demand for U.S. goods and services abroad, the recent weakness of the dollar may offset some of that weakness.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Total exports fell 4% from the previous month. Goods exports fell 5.9%, led by a decline in industrial supplies and materials. The remaining drop in exports came from a 3.1% decline in capital goods. Exports of consumer goods rose 6.9%, thanks in part to an increase in outbound shipments of pharmaceutical preparations. Exports of services slipped 0.2% due to lower sales of travel and transportation services, which includes travel spending by foreign visitors in the United States. Exports of intellectual property increased, as did those of other business services.
Imports fell again in May. Total imports fell 0.1%, following a record decline in April. Goods imports fell slightly, with a decline in imported consumer goods and industrial supplies offset by increases in auto, capital goods and “other” imports. Imports of services fell 0.2% on the back of weaker travel and transports imports.
The U.S. trade balance has markedly improved in the second quarter, compared with the first. This means that trade will likely provide a positive contribution to GDP growth in the second quarter, after shaving off a few percentage points from GDP in the first quarter.
Source: Bureau of Economic Analysis
Related content
-
Ask the Editor — Tax Questions on the New Senior DeductionAsk the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the new $6,000 deduction for taxpayers 65 and older.
-
These Summer 2025 Back-to-School Tax-Free Weekends Are Starting NowSales Tax Over a dozen states offer back-to-school shoppers a sales tax holiday this summer.
-
Breaking China's Stranglehold on Rare Earth ElementsThe Letter China is using its near-monopoly on critical minerals to win trade concessions. Can the U.S. find alternate supplies?
-
Things that Surprise Business Owners When It’s Time to SellThe Kiplinger Letter When it’s time to retire and enjoy the fruits of growing their business, owners are often surprised by how tough it is to give up their baby!
-
What New Tariffs Mean for Car ShoppersThe Kiplinger Letter Car deals are growing scarcer. Meanwhile, tax credits for EVs are on the way out, but tax breaks for car loans are coming.
-
AI’s Rapid Rise Sparks New Cyber ThreatsThe Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
-
Blue Collar Workers Add AI to Their ToolboxesThe Kiplinger Letter AI can’t fix a leak or install lighting, but more and more tradespeople are adopting artificial intelligence for back-office work and other tasks.
-
Will State Laws Hurt AI’s Future?The Kiplinger Letter Republicans in Congress are considering a moratorium on state AI laws. But it’s likely a growing patchwork of state AI regulations will be here for a while.
-
The New AI Agents Will Tackle Your To-Do ListThe Kiplinger Letter Autonomous AI agents “see” your computer screen, then complete a task, from buying a concert ticket to organizing email. This opens up a world of possibilities.
-
AI’s Medical RevolutionThe Kiplinger Letter Medicine is a field ripe for finding both exciting and practical uses for AI. The tech is already being used by doctors and researchers.
