U.S. trade gap falls 4.9% in April
Dip in imports eclipses 1st drop in exports in 5 months
The trade deficit in the U.S. narrowed in April as a drop in imports overshadowed the first decline in exports in five months.
The gap shrank 4.9 percent to $50.1 billion from $52.6 billion in March that was higher than previously estimated, the Commerce Department reported Friday.
U.S. exports, which had hit a record in March, fell 0.8 percent to $182.9 billion. Sales of everything from commercial jetliners to industrial machinery declined.
“With growth in Asia cooling, Europe in recession and the U.S. dollar strengthening, exports are likely in for another rough ride over the next year,” said James Marple, senior economist at TD Economics.
Imports, which also set a record in March, dropped an even faster 1.7 percent to $233 billion.
The trade gap remains wide and could weigh on growth in the April-June quarter, analysts said. A wider trade gap slows growth because it means the United States is spending more on foreign-made products than it is taking in from sales of U.S.-made goods.
The slip in exports shows that the weaker global economy is dampening demand for American-made goods. Export sales to Europe, China and Brazil declined.
“The overall global trade volume will slow down, reflecting weakening global demand,” said Joshua Shapiro, chief U.S. economist at MFR Inc. in New York. “U.S. exports and imports will continue to cool. Trade will be a broadly neutral factor for economic growth.”
Friday’s report also included annual revisions that showed the trade shortfall widened to $559.9 billion in all of 2011 from $494.7 billion the prior year.
U.S. exports to the 27-nation European Union dropped 11.1 percent in April. Europe’s debt crisis has worsened in recent months and many economists say the region is already in recession. Europe
accounts for almost one-fifth of U.S. exports.
Growth has also slowed in emerging market countries. Exports to Brazil fell 8.2 percent in April.
The U.S. deficit with China increased to $24.6 billion in April. This year’s deficit is running 11.9 percent ahead of last year, when the imbalance hit an all-time high of $295.4 billion. That’s the highest ever recorded for a single country.
U.S. wholesale businesses increased their stockpiles at a faster rate in April, responding to a strong gain in sales. The increase could be a good sign for economic growth in the April-June quarter, analysts said.
The Commerce Department said stockpiles grew 0.6 percent at the wholesale level in April, double the March gain. Sales by wholesale businesses jumped 1.1 percent in April, nearly three times the March sales gain.
Stockpiles at the wholesale level stood at $483.5 billion in April. That’s 25.6 percent above the post-recession low of $384.9 billion in September 2009.
Moderating economic growth combined with a global slowdown may encourage companies to refrain from building up inventories in anticipation of a pickup in sales.
Wholesalers had goods on hand to last 1.17 months at the current sales pace, unchanged from the prior month.
“We’re in an uncertain situation with everything going on in Europe,” Jay Bryson, senior global economist at Wells Fargo Securities LLC in Charlotte, N.C., said before the report. “You don’t want to be building a lot of inventory. If things don’t turn out really badly and we continue to grow, businesses will wake up.”