Trade gap cut as demand for U.S. goods grows

WaSHINGToN — The trade deficit in the U.S. narrowed more than forecast in April as imports receded, signaling merchandise flows were returning to normal following a port-related surge.

The gap shrank by 19.2 percent to $40.9 billion from the prior month’s $50.6 billion that was the widest in more than six years, Commerce Department figures showed Wednesday in Washington.

Purchases of foreign-made goods declined after the end of a labor dispute at West Coast ports caused them to jump in March.

Trade may become less of a detriment to the world’s largest economy as a more stable dollar and strengthening markets in Europe underpin overseas demand for American-made goods. At the same time, crude-oil production will probably continue to limit imports after the U.S. petroleum gap fell in April to the lowest level in 13 years.

“The trade gap returned to more normal levels after an inordinately large increase,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who projected the deficit would shrink to $39.5 billion. “That starts off the second quarter on a reasonably positive note.”

Separately, companies added more workers in May than the prior month, a sign U.S. job growth is getting back on track after a slow start to the year, another report showed Wednesday. The 201,000 increase in employment followed a revised 165,000 gain the prior month, according to figures from Roseland, N.J.-based ADP Research Institute.

March’s trade deficit was the largest since October 2008. It was initially reported as a $51.4 billion shortfall.

Imports declined 3.3 percent to $230.8 billion, after jumping 6.5 percent in March when West Coast ports cleared backlogs following the end of a labor dispute. Purchases of foreign-made cellular phones and clothing were among those showing the biggest declines.

The value of crude-oil imports was little changed at $11 billion compared with $10.5 billion in March. An increase in U.S. fuel exports allowed the trade deficit in petroleum products to shrink to $6.8 billion, the smallest since March 2002.

Excluding petroleum, the trade shortfall declined to $34.1 billion from $43.1 billion in March.

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