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Balance of trade data from the Census Department, chart by Mish

The Census Department Advance Trade Data shows the trade deficit widened by 11.1 percent in May.

• The international trade deficit was $96.6 billion in May, up $9.6 billion from $87.0 billion in April.
• Exports of goods for May were $179.2 billion, $9.7 billion less than April exports.
• Imports of goods for May were $275.8 billion, $0.1 billion less than April imports.

I have slightly different numbers because I subtract advance numbers from previous full data numbers rather than from precious advance numbers.

Goods Exports and Imports

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I see little since in making comparisons to numbers know to be wrong. So I compare advance numbers to the more accurate full data.

Doing so, I have imports down 2.082 billion an exports down 11.225 billion.

I calculate an increase in the deficit of 10.5 percent vs the reported 11.1 percent.

Impact on GDP Estimates

These numbers are much worse than the consensus estimates.

But it’s what the GDPModel expects, not what economists expect, that will matter to tomorrow’s GDPNow report.

My guess is that the model did not expect this negative change. Is accurate, then GDPNow will decrease for this data point.

However, there are many significant reports in the last two days, including a whopper of a revision to first-quarter GDP.

Unexpected Huge Negative Revisions to First-Quarter GDP and What it Means

Earlier today, I reported Unexpected Huge Negative Revisions to First-Quarter GDP and What it Means

Given poor retail sales, I thought PCE was high. And now we see huge revisions from the first contribution estimate of 1.21 down to 0.31 and that does not factor in May .

Today the Commerce Department reported International Trade was -96.6 billion bigger than the highest Bloomberg estimate. That means more inventory front-running.

Tomorrow the BEA reports personal consumption expenditures for May. The Consensus is +0.2 percentage points. I’ll take the under.

These changes are so wild that I do not know how the GDPNow model will react to them.

Upon reflection, and at the risk of looking silly, I will take a stab at 1.0 percent lower on the GDP revisions and tomorrow’s PCE report, plus another 0.5 percent lower for this data.

That would put GDPNow at 1.9 percent with another month of data to come. No apologies if wildly wrong.

I am more interested in the Blue Chip estimate that will accompany the GDPNow report.

Related Posts

June 17, 2025: Retail Sales Down Much More than Expected, Drop 0.9 Percent

Retail sales declined 0.9 percent led by autos down 3.5 percent.

June 23, 2025: Existing-Home Sales Rise 0.8 Percent in May, Inventory Soars

Existing home sales rose but flounder at low levels. Rising inventory will eventually impact prices.

June 25, 2025: Is the GDPNow Nowcast for the Second Quarter Overstated?

I had a conversation with GDPNow creator Pat Higgins on the difficulty of making estimates.

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