Trade deficit widens in April
The trade deficit in the United States widened in April to the largest gap in more than a year, according to a U.S. Census Bureau report released today.
Total April exports of $148.8 billion and imports of $189.1 billion resulted in a goods and services deficit of $40.3 billion. Exports declined more than imports, resulting in a $0.3 billion increase in the deficit from March.
The goods and services deficit increased $11.8 billion from April 2009, but overall exports were up $24.7 billion or 19.9 percent and imports were up $6.5 billion, or 23.9 percent.
The increase in the deficit signals that international trade will subtract from U.S. economic growth this quarter, Bloomberg reported.
The declines in imports and exports follow “big growth in both those categories in March, so it could just be some payback,” Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., told Bloomberg. He also said trade’s contributions to growth will diminish, “particularly now that you have the added factor that the dollar is strengthening and foreign growth might be slowing, particularly in Europe.”
The fallout from the European debt crisis might also be holding back trade flows in the coming months. Also, because the dollar has increased in value, American goods are less competitive abroad.