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According to the BEA's report today, the U.S. trade deficit in goods and services declined to $59.8 billion in May from $60.5 billion in April. Highlights include:

• Exports increased $1.4 billion in May and are up 17.8% versus last year. The gain in exports in May was led by fuel oil, chemical fertilizers, and other petroleum products.

• Imports increased $0.6 billion in May, a small rise after a large upward spike in April. Imports are up 12.5% versus a year ago. Imports were held down in May by a decline in autos and energy (petroleum products and natural gas).
• Adjusted for inflation, the trade deficit in goods is $11.6 billion smaller than last May and the smallest since 2002. Without adjusting for inflation, the trade deficit is $0.4 billion larger than last year.
Implications: The export boom continued in May and is adding substantially to real GDP growth. We now estimate the trade sector will add about two percentage points to real GDP growth in Q2, which leads us to boost our estimate of the overall real GDP growth rate in Q2 to 3% (previously 2.5%).