US trade deficit decreased by 2.3 per cent in May on the back of a slight increase in exports, which took it to the highest level in more than two years, data released by the Commerce Department showed.
US trade deficit in May stood at $46.5 billion, which was slightly lower than the $47.6 million shortfall registered in April, but the prospects of trade picking up would depend on economic growth in the second quarter, the Commerce Department stated.
The Commerce Department did not revise data on April trade deficit, which stood unchanged at $47.6 billion.
When adjusted for inflation, May trade deficit narrowed to $62.8 billion from $63.8 billion in April. Real goods exports surged to an all-time high in May, propelled by record high petroleum exports.
Still, real trade deficit averaged $63.3 billion in May and April, above the first quarter's average of $62.2 billion.
The US economy grew at an annualised rate of 1.4 per cent in the first three months of the year, with trade contributing 0.23 percentage points to the gross domestic product.
The Atlanta Federal Reserve forecasts GDP rising at a 3.0 per cent in the second quarter.
In May, US exports of goods and services rose 0.4 per cent to $192.0 billion, the highest level since April 2015, lifted by a surge in exports of consumer goods such as cell phones and other household goods.
Exports of motor vehicles and parts also increased slightly.
However, exports of food exports fell $0.7 billion amid a $0.6 billion drop in soybean shipments.
Exports to China increased by 3.6 per cent while the value of goods shipped to Mexico and Canada rose 5.4 per cent and 9.6 per cent, respectively. Exports to Germany rose 7.4 per cent.
Imports of goods and services dipped 0.1 per cent to $238.5 billion in May. Cell phone and other household goods imports fell $0.9 billion, accounting for the bulk of the $1.5 billion decrease in consumer goods imports.
Import of motor vehicles and parts also declined. However, imports of capital goods increased by $1.3 billion.
The country imported 265 million barrels of oil in May, the most since August 2012.
Imports of goods from China increased 11.6 per cent. The politically sensitive US-China trade deficit increased 14.4 per cent to $31.6 billion in May.
The trade gap with Mexico surged 15.8 per cent to $7.3 billion, the highest since October 2007.