The highest U.S. trade deficit since 2022 is expected to weigh on economic growth

The US trade deficit widened in May to its highest level since 2022 as goods exports fell more than imports.

Commerce Department data on Wednesday showed the trade deficit in goods and services widened 0.8 per cent month-on-month to $75.1 billion in May, the highest since October 2022. The median forecast of economists surveyed by Bloomberg was for a deficit of $76.5 billion.

Exports of goods and services fell 0.7% in May, while imports fell 0.3%, Bloomberg reported. The figures are not adjusted for inflation.

The widening trade deficit is expected to weigh on gross domestic product growth for the second straight quarter. Ahead of Wednesday's data release, the Atlanta Fed's GDPNow forecast showed trade subtracting nearly one percentage point from second-quarter growth.

Shipments of U.S. goods to overseas customers fell to their lowest level since November as exports of industrial supplies, aircraft and automobiles fell, limited economic growth in overseas markets and a strong dollar dampened demand for U.S. goods and services.