May US trade deficit surges as imports climb broadly again

The US trade deficit widened to $77.6 billion in May as exports fell and imports rose. The shift gives economists a key input for second-quarter GDP estimates.

Commerce Department data released Tuesday showed the goods-and-services gap increased 42.2% from the previous month, reaching its widest level since March 2025. The deficit was slightly smaller than the $78.4 billion median forecast in an economist survey cited in the source material.

Exports lost gold support

The pressure came from both sides of the trade ledger. Exports dropped 3.2% by value, with nonmonetary gold accounting for a major part of the decline, while imports increased 3.3% in a broad rise across categories.

The May figures followed several months in which oil and petroleum exports had helped narrow the damage from strong import demand. Those energy shipments were supported by war-related market conditions around Iran, according to the source material.

Data-center imports kept rising

The import mix points to the strain created by the US buildout of data centers and related digital infrastructure. Imports of computer accessories and semiconductors rose again in May, while purchases of computers and telecommunications equipment declined.

That pattern matters because capital goods imports can signal domestic investment demand, not only consumer appetite for foreign products. If firms are bringing in chips, server components and related equipment, the trade deficit can widen even while parts of the domestic investment cycle remain active.

Recent purchasing-manager surveys also suggested companies may have pulled some foreign goods forward. The source material said firms were trying to reduce exposure to war-related supply-chain disruptions and possible price increases, a behavior that can inflate imports before actual end-demand is clear.

Oil cushion started fading

Oil exports continued to increase in May, according to the Commerce Department report. Weekly Energy Information Administration data cited in the source material showed that, by June 26, oil and petroleum product exports had largely returned to levels seen before the war-related surge.

That timing is important for the next round of data. If energy exports stop cushioning the trade account while technology-related imports stay elevated, the deficit could remain a drag on measured output even if the underlying reason is investment in domestic capacity.

GDP estimates face a drag

The trade release will feed directly into estimates for second-quarter gross domestic product. Before the May figures, the Federal Reserve Bank of Atlanta's GDPNow model showed net exports subtracting 1.62 percentage points from second-quarter growth, compared with a 0.37 percentage-point deduction in the first quarter.

The mechanism is straightforward: GDP subtracts imports because they are produced abroad, while exports add to domestic output. A larger deficit therefore pulls down headline growth calculations, even when some imported goods support future production inside the United States.

Three conditional paths now matter. If imports remain high because data-center investment continues and exporters lose the oil boost, global trade flows would reflect stronger US demand for advanced equipment, US growth math would face a larger net-export deduction, and semiconductor suppliers could see sustained order support.

If stockpiling fades instead, the deficit could narrow without requiring a sharp economic slowdown. That would reduce the macro drag, ease pressure on US importers managing inventories, and leave the technology supply chain more dependent on genuine infrastructure spending than defensive buying.

A third path depends on energy shipments. If oil exports rebound again, they could offset part of the goods gap, limit the hit to GDP tracking models, and give the energy sector more influence over the trade balance while technology imports continue to shape the capital-goods side.