The latest trade data, released Friday by the Commerce Department, suggested that U.S. exports, which shot up 1.6 percent from April, may finally have begun to rebound after all but collapsing last fall and into early this year. The better-than-expected May trade figures prompted analysts to nudge up their estimate of the U.S. economic output for the second quarter. 'We thought the (gross domestic product) was going to drop more than 2 percent,' said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Mass. 'After the report, we think it's less than 2 percent.' The U.S. GDP contracted 5.5 percent in the first quarter. Still, despite the up-tick, analysts note that exports remain low. And in contrast to some past downturns, overseas sales are considered unlikely to bounce back sharply enough to propel an economic recovery. Demand from Europe and Japan is not expected to accelerate any time soon. What's more, with many leading economies struggling to curb rising unemployment at home, there are concerns of continuing or rising protectionism -- despite a pledge by the heads of major industrial nations, including President Barack Obama, at the G-8 summit in Italy this week to promote open markets and reject protectionist measures. Imports to the U.S. fell 0.6 percent in May, the 10th straight monthly decline, reflecting the weak demand in the American economy overall. Businesses bought less oil and industrial supplies, and recession-battered consumers cut back on purchases of things such as apparel and jewelry. Hence, the trade deficit fell in May to $26 billion -- down from nearly $29 billion in April and about $60 billion in May 2008 and during much of last year. While the decline was welcomed by analysts, they noted that it was hardly cause for celebration. 'We're having to borrow less money every month from foreign sources ... but 17 months into this deep recession, we're still running a trade deficit of almost $1 billion a day,' said Charles W. McMillion, president of MBG Information Services, a trade research business in Washington. Moreover, he and others pointed out that America's politically sensitive trade deficit with China bucked the trend and widened in May, by 4.4 percent, to $17.5 billion. U.S. exports to China, seasonally unadjusted, increased 1.6 percent in May from the previous month, but imports from China went up by 3.7 percent. The United States narrowed its trade deficit with its other major trading partners, including Canada, Mexico and Japan, with whom the gap fell to its lowest monthly level in 25 years. The Commerce data showed that U.S. exports of goods and services totaled $123.3 billion in May. The seasonally adjusted increase from April largely was because of a jump in petroleum product sales. But there were also solid gains in shipments of chemicals and some other industrial supplies, which as a whole jumped almost 10 percent over the month. Exports of capital goods, excluding automobiles and parts, ticked up 0.4 percent in May -- a positive sign given that this category, which includes industrial machines, semiconductors and airplanes, account for almost half of merchandise exports and are vital to America's industrial strength. 'They are still pretty small green shoots,' said Frank Vargo, vice president of trade at the National Association of Manufacturers. For capital goods exports to take off, he said, foreigners would have to ramp up their plants and equipment purchases. 'I'm not hearing optimistic things from small exporters yet,' he said. 