May trade deficit narrowed to -$43.1b from..>

US DATA: May trade deficit narrowed to -$43.1b from -$46.1b in April, a 

slightly narrower gap than -$43.5b exp, even as the census goods gap 

(-$64.8) was little changed from the advance estimate.

- The April and May chained-dollar trade data suggest a smaller net 

export gap for 2Q GDP than in 1Q when it is released in a few weeks.

- Exports rose solidly on gains in capital goods (+$2.0b, aircraft 

+$1.9b), food and feeds (+$1.7b), and consumer goods (+$0.6b). These 

were offset by declines in industrial supplies (-$1.3b) and autos (-$0.4b).

- The sharp decline in industrial supply exports could be a sign of 

reduced capital expenditures on the part of trading partners ahead of 

tariff implementation. The June data should show a larger tariff impact.

- The NSA trade gap with China widened sharply to -$33.2b from -$28.0b 

in April, while the trade gap with Canada nearly doubled to -$1.5b from 

-$0.8b and the gap with Mexico widened to -$6.7b from -$5.7b, 

interesting ahead of the tariff implementations

- Imports rose more modestly on capital goods (+$2.1b, telecomm +$0.6b) 

and foods (+$0.1b) that were offset by consumer goods (-$0.5b), autos 

(-$0.3b), and industrial supplies (flat, crude oil (-$0.7b).