July 11 (Bloomberg) -- The trade deficit in the U.S. narrowed in May as falling crude oil prices and weakening demand for consumer goods trimmed the import bill.
The gap shrank 3.8 percent to $48.7 billion, in line with the median estimate of economists surveyed by Bloomberg News, from $50.6 billion in April, Commerce Department figures showed today in Washington. Purchases from abroad fell to the lowest level in three months, while exports climbed to the second- highest on record.
Slowing global growth, which led central banks from Europe to China to cut interest rates and announce more stimulus a week ago, may signal American companies will have a harder time boosting overseas sales. At the same time, an increase in imports of business equipment indicates sustained investment in the U.S., and more inbound shipments of cars point to continued strength in the auto industry.
“The trade deficit will drift slightly lower because of the decline in the price of oil,” said Jay Bryson, senior global economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who was the only analyst to correctly project the trade outcome. “Exports are holding up, but as we go forward we are going to see pretty weak numbers given the slowdown abroad. Our economy has slowed as well.”
Stocks declined for a fifth day as investors awaited minutes of last month’s Federal Reserve meeting for signs of further stimulus measures. The Standard & Poor’s 500 Index fell 0.1 percent to 1,339.73 at 11:21 a.m. in New York.
The median forecast in the Bloomberg survey of 70 economists called for the deficit to shrink to $48.6 billion. Estimates ranged from $42.5 billion to $51 billion. The Commerce Department revised the trade deficit for April from an initially reported $50.1 billion.
Imports dropped 0.7 percent to $231.8 billion, the fewest since February, from $233.3 billion the prior month. Demand for crude oil plunged by $2.82 billion in May. Purchases of foreign- made consumer goods like mobile phones and clothing decreased by $375 million, pointing to a slowdown in household spending.
The drop in imports was also reflected in a slower pace of inventory accumulation at the nation’s wholesalers in May. The 0.3 percent gain in stockpiles followed April’s 0.5 percent increase that was smaller than previously estimated, the Commerce Department also reported.
The trade shortfall excluding petroleum widened to $23.8 billion from $22.5 billion in April.