U.S. Trade Deficit Expands In April

The U.S. trade deficit widened a bit in April, as the value of crude imports hit the highest level in a year and a half.

U.S. exports fell 0.7% to $148.81 billion from $149.83 billion the previous month. Imports decreased, falling 0.4% to $189.09 billion from $189.88 billion in March.

The U.S. deficit in international trade of goods and services increased 0.6% to $40.29 billion from a revised $40.05 billion the month before, the Commerce Department said. The March trade gap was originally reported as $40.42 billion.

The U.S. trade deficit with China expanded in April to $19.31 billion from $16.90 billion the month before. Exports fell by $813 million, while imports rose $1.61 billion.

Trade, which was one of the few strengths in the economy during the recent recession, has become a drag on the recovery as imports have outpaced exports. Trade subtracted 0.66 of a percentage point from gross domestic product during the first quarter.

The real, or inflation-adjusted deficit, which economists use to measure the impact of trade on GDP, rose to $44.33 billion from $44.09 billion in March, up three straight months, Commerce said Thursday.

The U.S. bill for crude oil imports in April rose to $22.69 billion, the highest amount since October 2008, from $22.26 billion the month before. The average price per barrel climbed $2.81 to $77.13, a level also not seen since October 2008. Crude import volumes fell slightly to 294.12 million barrels from 299.47 million -- a 1.8% fall.

The U.S. paid 28.83 billion for all types of energy-related imports, up from $27.81 billion in March.

Imports of industrial supplies increased $98 million in April, driven by purchases of fuel oil. Auto and related parts imports decreased $183 million.

Overseas purchases of foreign-made consumer goods like televisions and pharmaceuticals fell $1.7 billion. Food and feed imports fell $10 million. April purchases of foreign-made capital goods such as aircraft engines rose $1.44 billion.

As for exports, sales abroad of industrial supplies, including petroleum products, increased $588 million. Exports of consumer goods, including art and jewelry, fell $741 million.

Capital goods exports decreased marginally by $2 million, while exports of food, feed, and beverages fell by $647 million. Auto exports increased $127 million.

Trade deficits with other major trading partners mostly narrowed, with the exception of Canada. The trade gap with the euro area fell 29% to $4.83 billion from $6.83 billion. The gap with Mexico fell to $5.33 billion from the prior month at $6.04 billion. The deficit with Japan fell to $4.82 billion from $5.32 billion.

However, the deficit with Canada widened to $2.94 billion from $2.18 billion.

U.S. Trade Deficit Expands In April

TradingEconomics.com, WSJ
6/10/2010 9:54:27 AM