The U.S. trade deficit widened in May as the COVID-19 pandemic pushed exports to their lowest level since 2009, strengthening expectations the economy will contract in the second quarter at its steepest pace since the Great Depression.
The Commerce Department said on Thursday the trade deficit increased 9.7% to $54.6 billion. Economists polled by Reuters had forecast the trade gap would widen to $53 billion in May.
Exports tumbled 4.4% to $144.5 billion, the lowest since November 2009. Goods exports plunged 5.8% to $90.0 billion, the lowest since August 2009.
Travel restrictions weighed on exports of services, which fell to $54.5 billion, the lowest since December 2011.
Imports slipped 0.9% to $199.1 billion, the lowest since July 2010. Goods imports fell 0.8% to $166.0 billion, the lowest since September 2010.
Declining imports have led businesses to draw down on inventories, which will contribute to sinking gross domestic product in the second quarter.
The Atlanta Federal Reserve is forecasting that GDP will plunge at a record 36.8% annualized rate in the April-June quarter. The economy contracted at a 5.0% rate in the first quarter, the sharpest decline since the 2007-2009 recession.