The Census said the U.S. trade deficit widened 6.9% in April to -$47.2 billion.
It’s the largest deficit in two years.
“Americans bought record amounts of consumer goods, business equipment and automobiles from abroad,” Bloomberg said.
Consumer goods imports climbed $US1.1 billion, automotive
vehicles, parts, and engines jumped $US0.9 billion; and capital goods imports surged $US0.8 billion.
Pantheon Macro’s Ian Shepherdson had a different take, suggesting the deficit was more a reflection of a lack of exports.
The April details are disappointing. All the headline damage is in the ex-petroleum deficit; net petroleum imports fell by $US1.0B to a four-month low. But non-oil exports fell 0.2% while imports rose 1.2%. The ISM survey points to a much better export performance, so we hope for an improved performance in May. Exports should rebound and imports should correct to the downside; the 4.3% total increase in non-oil imports in Mar/Apr is unsustainable. Still, trade looks likely to be a small drag on Q2 GDP.”
Capital Economics’ Paul Ashworth agreed:
The 0.2% m/m decline in April’s exports, coupled with the 1.2% m/m rise in imports, is not a great start to the second quarter either. We still anticipate that second-quarter GDP growth will be as high as 3.5%, however, with the drag from rising imports partly offset by a positive contribution from rising inventories and domestic sales.
Consensus was for a much smaller gap, to -$40.8 billion.
March’s figure was revised down to -$44.2 billion.
Here’s the table:
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