The U.S. merchandise-trade deficit widened in May to the biggest in more than a year as exports pulled back from record levels and imports continued a steady march higher.

The shortfall in goods trade grew 27.4% from the prior month to $105.8 billion, Commerce Department data showed June 26. The figure isn’t adjusted for inflation. The median estimate in a Bloomberg survey of economists called for an $85 billion deficit. 

U.S. exports of goods decreased 5.4%, propelled by a decline across categories including outbound shipments of industrial supplies, where crude oil and petroleum products are counted. Imports rose 3.6% to the highest level since March 2025.

U.S. oil exports surged to record levels in April as the Iran war severely disrupted the Middle East trade. Flows through the Strait of Hormuz have ramped up this month and prices have come down following progress in U.S.-Iran peace negotiations. Asian fuel makers are also reducing their intake of U.S. oil because of steep shipping costs.

“It’s likely that falling oil prices in May pushed the nominal industrial supplies figure lower,” Oren Klachkin, an economist at Nationwide, said in a note. Looking ahead, “the effective reopening of the Strait of Hormuz should support a recovery in global trade flows,” he said.

The report showed large declines in exports of both the volatile consumer goods category and capital goods, which in April had advanced to a record high.

Meanwhile, there has been a steady flow of equipment into the U.S. for the data center buildout in recent months. In May, imports of capital goods — a category which includes computers and accessories, semiconductors and telecommunications equipment — continued to rise, June 26’s data showed. From a year earlier, they were up nearly 42%.

Imports of consumer goods rose to the highest level in six months. A separate report on June 25 showed U.S. consumer spending accelerated in May even as prices rose at the fastest pace in more than three years.

Companies have also been building stockpiles of goods and materials as supply-chain delays have become more widespread, fueling concerns about additional price hikes, according to recent surveys of purchasing managers.

The latest advance economic indicators report showed retail inventories advanced 0.6% in May. Wholesale inventories were up 0.3% on the month and 4.3% from a year earlier, marking the best 12-month stretch in three years.

More complete May trade figures that include the balance on the services account are due July 7. A separate report on June 25 showed that in the first quarter, net exports subtracted from the government’s calculation of gross domestic product by the most in a year.