http://www.zerohedge.com/article/trade-deficit-surges-hits-502-billion-expectations-441-billion-major-downward-revisions-q2-gWhen we reported on the record surge in Chinese exports
http://www.zerohedge.com/article/chinese-exports-surge-record-trade-surplus-comes-almost-double-consensus over the weekend we said that "the official read of the US trade deficit which will be reported on Tuesday, will almost certainly spike, pushing GDP expectations lower yet again." Sure enough, the US May trade deficit just exploded to $50.2 billion, far above the consensus of $44.1 billion, and much worse than April's revised $43.6 billion. Imports, not surprisingly, surged to an all time high $225.1 billion with exports lagging, even despite the relatively weak dollar in May, which declined modestly to $174.9 billion.
From the report: "The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total May exports of $174.9 billion and imports of $225.1 billion resulted in a goods and services deficit of $50.2 billion, up from $43.6 billion in April, revised. May exports were $1.0 billion less than April exports of $175.8 billion. May imports were $5.6 billion more than April imports of $219.4 billion." Accoding to Bloomberg's Brusuelas, the key culprits were petroleum and industrial supplies. For those wondering what America exports and imports: "In May, the goods deficit increased $6.7 billion from April to $64.9 billion, and the services surplus increased $0.1 billion to $14.7 billion." So why do people care about the manufacturing CPI again? Bottom line: the bean counters will now be forced to revise their Q2 GDP forecasts well lower. And while Q2 is now a scratch, the problem is that this weakness is now continuing into Q3.
FULL REPORT:
http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf