Wider April Trade Deficit May Drive Down Second-Quarter GDP

Before you go, we thought you'd like these...
Before you go close icon

cargo shipThe so-called U.S. trade balance, what the rest of us have referred to for years as the trade deficit, came in at a much worse reading than expected for the month of April: -$47.2 billion. Bloomberg had the consensus estimate at only -$41.0 billion.

While this difference of $6.2 billion may not seem like much on the surface, consider what it means on an annualized basis if the deficit was $6.2 billion every month were hit. That is another $74.4 billion deficit each year, on top of the deficits we already have. This is enough money on an annualized basis that it could help to ratchet down some second-quarter growth numbers in gross domestic product (GDP).

To add insult to injury, the trade balance in March was revised to a wider -$44.2 billion from a preliminary report of -$40.4 billion. The only good news is that some of the wider deficit is attributed to annual revisions.

Exports fell by 0.2% in April, but that was compared to a 2.0% gain in March. Imports rose by about 1.2% in April, down from about 3.1% in March.

With all the increases in energy exports being such a focus in America, the higher trade deficit seems to be from goods excluding petroleum ($46.8 billion in April versus $42.2 billion in March). The petroleum shortfall managed to fall to $18 billion from $19 billion, but the service surplus rose up to $18.6 billion in April from $18.3 billion.

April's largest deficit was with the European Union, hitting a new high of $13.1 billion in April, versus $11.2 billion in March. The deficit with China was $28 billion in April, versus $26.3 billion in March. The OPEC deficit was $5.5 billion in April, versus $5.9 billion in March. Our trade deficit with Japan was $5.3 billion in April, versus $5.7 billion in March. The trade surpluses were with Hong Kong, Singapore, Brazil and Australia.

ALSO READ: U.S. and China Solar Tariff Fight Intensifies

Filed under: Economy
Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading