US May merchandise trade deficit spikes to 14‑month high as imports surge

The United States recorded a merchandise trade deficit of $1.058 trillion in May, up 27.4% from the previous month and the largest since March 2025. Imports rose 3.6% to $313.4 billion, driven by a 6.3% jump in auto imports, a 5.7% increase in consumer goods, and a near‑42% year‑over‑year rise in capital goods such as computers, semiconductors and telecom equipment for data‑center construction. Exports fell 5.4% to $207.7 billion, with declines in consumer goods and industrial raw materials, including oil products. Analysts responded by lowering Q2 GDP growth forecasts: Morgan Stanley to 2.1% (from 2.5%) and Goldman Sachs to 2.2% (from 2.4%). The trade imbalance is attributed to corporate stockpiling ahead of disruptions from the Iran‑related conflict in the Strait of Hormuz and continued AI‑driven demand for imported equipment.