U.S. Trade Deficit Widens to $77.6B in May on Surge in Imports — Evening Brief – 07.07.26

The U.S. trade deficit widened sharply in May as exports retreated and imports rebounded, reversing part of April’s improvement while remaining slightly better than economists had expected. Despite the monthly increase, the nation’s trade balance continues to show significant improvement compared with the same period last year, reflecting stronger export growth and lower import demand on a year-to-date basis.

The U.S. international trade deficit in goods and services increased to $77.6 billion in May from a revised $54.6 billion in April, according to data released Tuesday by the U.S. Census Bureau and the Bureau of Economic Analysis. The result was modestly better than the consensus forecast of a $78.7 billion deficit.

The wider deficit was driven primarily by a larger goods trade gap, which expanded by $23.6 billion to $106.5 billion. The services surplus increased modestly by $0.6 billion to $28.9 billion, partially offsetting the deterioration in goods trade.

Total exports fell to $317.7 billion in May from $328.2 billion in April, while imports climbed to $395.3 billion from $382.8 billion during the same period.

Despite the monthly setback, the broader trend remains favorable. Through the first five months of 2026, the U.S. goods and services deficit declined by $203.9 billion, or 40.6%, compared with the same period in 2025.

Year to date, exports have increased by $164.7 billion, or 11.7%, while imports have fallen by $39.2 billion, or 2.1%, highlighting continued strength in overseas demand for U.S. goods and services alongside moderating import activity.