The U.S. trade deficit narrowed more than expected in May as exports rose to a record high, the government reported Thursday, suggesting trade could be less of a limit on second-quarter growth than earlier thought. The Commerce Department said the trade deficit fell 5.6 percent to $44.4 billion. The trade deficit in April was revised slightly down to $47 billion. Economists had expected the May deficit to narrow to $45 billion. Exports of goods and services increased 1 percent in May to a record high of $195.5 billion, driven by a surge in automobiles, parts, and engines, which rose to a record high. Exports of consumer goods also were the highest on record, and exports of petroleum products rose. Imports fell 0.3 percent to $239.8 billion as petroleum imports dropped to their lowest level since late 2010. Non-petroleum imports, however, hit a record high in May. The high level of imports points to an acceleration in domestic demand, which cannot be satisfied with locally produced goods, and is consistent with expectations of a rebound in growth in the second quarter. Many analysts expect growth will rebound to a healthy rate between 3 and 3.5 percent, helped partly by stronger exports. The trade deficit subtracted 1.5 percentage points from first-quarter gross domestic product (GDP). The economy contracted at a 2.9 percent annual rate in the first three months of year.
