The U.S. trade deficit widened in April but the increase was less than economists expected and exports of goods improved as the dollar’s rally eased.
The Commerce Department said the goods and services deficit rose 5.3% to $37.4 billion in April, as exports rose 1.5% to $182.8 billion, while imports rose 2.1% to $220.2 billion.
Year-to-date, the goods and services deficit decreased $8.1 billion, or 4.8%, from the same period in 2015. Exports decreased $39 billion or 5.1%, while imports decreased $47.1 billion or 5.1%.
Economists surveyed by The Wall Street Journal had expected a deficit of $41.5 billion in April and those polled by Reuters forecast a $41.3 billion shortfall. March’s trade deficit was revised to $35.54 billion — the lowest deficit since December 2013 — from a previously estimated $40.44 billion.
“Slow global growth has curbed demand for U.S.-made products, while the dollar’s rise in value against other currencies since mid-2014 has made exports more expensive for foreign buyers, imports cheaper in the U.S. and depressed earnings of American companies with significant overseas business,” the WSJ said.
But U.S. firms experienced some relief with the easing of the dollar’s value since its peak in January. Exports of goods increased 2.5%t to $120.1 billion in April.
Overall exports of goods and services rose 1.5% to $182.8 billion in April. Reflecting low oil prices and domestic energy production that is still historically robust, the petroleum deficit was the lowest since February 1999 and the trade surplus with Canada — the leading supplier of foreign oil to the U. S. — was the highest on record.
Trade subtracted an estimated 0.21 percentage point from gross domestic product during the first quarter, the Commerce Department said in a separate report. But Reuters noted that the deficit for April was smaller than the monthly average for the first quarter, suggesting trade will probably contribute to GDP in the second quarter.