USA: The trade deficit shrank in May, a record in exports

The US trade deficit narrowed in May as a slowdown in domestic consumption amid the Federal Reserve’s policy-tightening campaign appears to be starting to weigh on imports.

In particular, the US trade deficit fell 1.3% to $85.5 billion, according to data released by the US Commerce Department. The trade deficit shrank for a second consecutive month, following a record $107.7 billion set in March.

Since March the Federal Reserve has raised interest rates by a total of 150 basis points as it seeks to moderate domestic demand to lower inflation.

Government data released today showed imports of goods and services rose 0.6 percent in May to $341.4 billion, while exports jumped 1.2 percent to a record $255.9 billion, completing four consecutive up months.

Source: Capital

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