U.S. Trade Deficit Narrows

ByBridgeNews The U.S. trade deficit narrowed in April, shrinking 2.7% to $32.2 billion as weak demand for imports and exports, and continued culling of overbuilt inventories provided modest improvement compared with a revised $33.1 billion deficit in March. The April trade gap narrowed despite a 5.3% jump in the cost of oil imports and a record average of barrels imported per day. In a reflection of weak global demand, both imports and exports of capital goods declined. The April trade gap reflected a $37.8 billion shortfall in goods and a $5.7 billion surplus in services. Exports fell 2.0% to $86.9 billion, the lowest since March 2000, as weaker demand for capital goods and industrial materials was partially offset by an increase in consumer goods, which hit a record $7.9 billion. Civilian aircraft exports fell 19.9% to $2.0 billion. Excluding sales of civilian aircraft, goods exports were 2.1% below the prior month. Imports fell 2.2% to $119.1 billion as demand weakened for capital goods, as well as consumer goods. Imports of capital goods were at their lowest level since November 1999. Analysts had expected a gap of $31.0 billion. Oil again helped to erode the U.S. trade position. While the cost of imported crude averaged $21.65 per barrel, down from March's $22.76, the total value of crude imports rose 5.3% to $9.7 billion. Volume rose to a record average 10.3 million barrels per day. The U.S. goods trade position worsened with many key trading partners. The government does not seasonally adjust the bilateral trade statistics, so changes in the U.S. trade situation with individual countries do not fully reflect the overall data, which are seasonally adjusted. The April report showed the politically sensitive U.S. trade gap with Japan widened to $6.4 billion from March's $6.2 billion. The deficit with China widened to $6.3 from $5.7 billion a month earlier. The trade gap with the 11 euro-area countries was $5.1 billion in April, widening from $4.4 billion one month earlier. For the year to date, the U.S.-euro area trade gap is $16.6 billion, widening from $14.3 billion the same period a year ago.