(fxcue news) - A report released by the Commerce Department on Wednesday showed the U.S. trade deficit widened less than expected in the month of May. The Commerce Department said the trade deficit rose to $75.1 billion in May from a revised $74.5 billion in April. Economists had expected the trade deficit to increase to $76.2 billion from the $74.6 billion originally reported for the previous month. The trade deficit in May marked the largest gap since the deficit reached $75.3 billion in October 2022. "The widening of the trade deficit was not as large as implied by the advance trade report, but net trade is still on track for a 0.7ppt drag on Q2 real GDP growth," said Matthew Martin, U.S. Economist at Oxford Economics. "After nearly two years of positive contributions to growth, trade has been a substantial weight in the first half of 2024," he added. "However, higher imports should translate into increased inventories, which are on track to grow in Q2." The wider trade deficit compared to the previous month came as the value of exports decreased by more than the value of imports. The report said the value of exports slid by 0.7 percent to $261.7 billion in May after climbing by 0.7 percent to $263.4 billion in April. The report showed a notable decrease in exports of industrial supplies and materials as well as a dip in exports of automotive vehicles, parts, and engines Meanwhile, the value of imports fell by 0.3 percent to $336.7 billion in May after surging by 2.3 percent to $337.9 billion in April. Significant declines in exports of consumer goods, particularly pharmaceuticals, and automotive vehicles, parts, and engines were partly offset by a jump in imports of industrial supplies and materials. The Commerce Department also said the goods deficit widened to $100.2 billion in May from $99.3 billion in April, while the services surplus rose to $25.1 billion in May from $24.8 billion in April.