Long live the trade deficit! For many Americans the month report on U.S. International Trade in Goods is simply called the U.S. trade deficit. After all, when was the last time anyone saw the U.S. post a trade surplus?

A new Commerce Department report covering May 2016 showed that International Trade saw a level of -$60.6 billion. Bloomberg was projecting a report at -$59.3 billion, with an Econoday range of -$55 billion to -$60.7 billion.

It turns out that exports were soft in May and imports rose. Interestingly enough, this is after a period where some of the extreme U.S. dollar strength had abated. April’s International Trade reading was -$57.5 billion.

Exports were down by 0.2%, after a decline in exports of cars and auto-related products and from weaker exports of capital goods.

Imports were up by 1.6%, which threw the trade deficit out of balance versus trends and expectations. Imports of consumer goods were said to be strong, which might point to stronger business and consumer confidence. That being said, Friday’s Brexit news was not even a factor back in May when all of this activity was in the making.

Industrial supplies imports were made larger by the recent rise in energy prices. Still, capital goods imports were weak and showing that business investment and productivity continue to grind lower or flat.

The weak level of exports only continued to reflect somewhat weak global demand. Another issue to consider is that a wider trade gap acts as a net negative for the second quarter gross domestic product (GDP) that will be reported in a month from now.

Again, the impact of the Brexit vote is taking place in the last seven days of the quarter. That might mute much of the actual numbers for the second quarter, but it may bode quite poorly for the start of the third quarter when companies begin identifying and ultimately making their orders for the end of the year.

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