By Jason Cooper, CPA Research Assistant
According to the latest US government report the US trade deficit in May was $43.1 billion, the smallest deficit since September of 2017. The smaller deficit was driven by a $3.7 billion increase in exports from April to May, with exports of $144.9 billion in May. Product categories showing strong export growth included soybean exports, up 90% to $4.1 billion and civilian aircraft exports, up 57% to $5.2 billion.
On a year-to-date basis, the US trade deficit (including goods and services) for the five months January through May this year came in at $244.8 billion, up 7.9% over the same period in 2017. On current trends the 2018 trade deficit is set to come in at around $596 billion this year, the highest since 2008. For January through May, US imports are running 9% ahead of the same period in 2017, indicating that 2018 could finish up with imports at $3.2 trillion, which would be a new record for US imports and the first time above $3 trillion.
When we exclude services and look at goods alone, the picture looks worse. Our deficit in goods for the first five months of the year totaled $355 billion, 8% worse than the year-earlier period. On current trends, we are on track for a 2018 goods deficit of $862 billion, which would be the highest on record. The goods deficit is viewed as more important than the services surplus, not only because it is more than twice as large, but also because goods create more jobs per dollar of trade than services, and the production of goods typically creates additional business in supporting services.
Advanced Technology Products (ATP) Deficit Up 33%
The 2018 ATP trade deficit was $45 billion through May, so far this year, 33% worse than the comparable period in 2017, and 80% worse than the first five months of 2016. The ATP deficit was overwhelmingly driven by the $53 billion deficit with China, larger than the overall deficit. Within the Advanced Technology sector, the USA ran a $66 billion deficit in Information and Communications, and an additional $18 billion in deficits from 5 other categories. The one bright spot is Aerospace, which showed a $34 billion surplus for January through May.