US Trade Gap Falls in April as Ports Bottleneck Ebbs

US Trade Gap Falls in April as Ports Bottleneck Ebbs

The Commerce Department reported Wednesday that the April trade deficit fell to $40.9 billion from the huge $50.6 billion in March.

The U.S. trade deficit fell back to a more normal level in April after a surge the previous month as the distortions from the West Coast port slowdown began to ebb.

The Commerce Department reported Wednesday that the April deficit fell to $40.9 billion from the huge $50.6 billion in March. 

Exports gained $1.9 billion to $189.9 billion, while imports fell $7.8 billion to $230.8 billion.

The return to normal of processing goods through the key ports on the Pacific coast appeared to be the main reason for the sharp swing, said Ian Shepherdson of Pantheon Macroeconomics.

"The March deficit was massively boosted by a surge in imports following the end of the port dispute on the West Coast, while export rose only marginally. This story partly reversed in April," he said.

The export rebound could continue, he added. Data shows "that exports still need to rise much further in order to unwind the impact of the port dispute," he said.

The deficit the first four months of the year was up just 0.9% from the same period in 2014. But underpinning that was a 2.3% decline in exports, compared to a 1.8% rise in imports.

Overall the April data is a good sign for a rebound in U.S. economic growth in the second quarter after the first quarter contraction, analysts said.

"The huge drag on GDP from trade in Q1 will almost certainly not be repeated in Q2.  Trade could even be a modest plus, helped by a reversal of port delay effects," said Jim O'Sullivan of High Frequency Economics.

Even with U.S. exports improving after a poor start in 2015, said Michael Dolega, senior economist for TD Economics, "the lofty dollar and lukewarm global demand will continue to hinder them over the medium term. Some reprieve could come should global growth accelerate more robustly given the substantial monetary policy accommodation that global central banks are deploying in Europe and Asia."

Copyright Agence France-Presse, 2015. Additional reporting by IndustryWeek.

TAGS: The Economy
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