WASHINGTON—The U.S. trade deficit in goods narrowed in May as imports fell, but the improvement was probably insufficient to prevent trade from being a drag on economic growth in the second quarter.
The hit from trade on gross domestic product was, however, likely to be offset by a rise in inventory investment, with the report from the Commerce Department on Wednesday also showing retail inventories increasing strongly last month.
A raft of upbeat data this month, including nonfarm payrolls, retail sales, durable goods orders, and housing starts, have suggested that the economy remained on a steady growth path in the second quarter, defying growing fears of a recession….