--Imports from Japan -$1.8B NSA to low since May '99 (Autos -$0.6B)
--Exports +$0.8B: Oil Eqpt +$0.4B, Aircraft +$0.3B
--Country Data: Japan -$4.8B, China -$6.1B, W Europe -$4.6B, OPEC -$4.1B

By Joseph Plocek
WASHINGTON (MktNews) - A surprising, and possibly temporary, drop in imports from Japan helped move the U.S. May trade balance to a small -$28.3 billion, its narrowest since January 2000.
The May trade gap compares with a revised -$32.0 billion in April and with the median estimate in a Market News International poll of economists of -$32 billion for May.
A major factor in the narrowing in the trade gap was a $2.9 billion plunge in imports as the U.S. economy remained weak. Imports from Japan fell $1.8 billion (unadjusted data). By category, capital goods imports (SA) fell $1.3 billion, mostly in the computer and telecom sectors, while consumer goods dropped $0.7 billion and autos fell $0.5 billion.
May exports were up $0.8 billion.
The trade deficit with Japan was -$4.8 billion NSA (versus -$6.4 billion in April. For China the gap was -$6.1 billion versus -$6.3 billion, with OPEC -$4.1 billion versus -$3.7 billion, and with Western Europe -$4.6 billion versus -$5.8 billion as exports rose to the U.K. and Germany.
The trade data should give a boost to U.S. Q2 growth. Real net exports for Q2 are about $1.5 billion below their Q1 average. A similar drop in Q1 added about 0.7 point to GDP growth.
A key question is whether imports from Japan will remain low as the U.S. economy recovers. History suggests this might not be the case.