By Ana Monteiro and Eric Martin (Bloomberg) —
The U.S. merchandise trade deficit narrowed in April by the biggest since 2009, as imports fell amid lockdowns in China while exports hit a record high.
The shortfall narrowed 15.9% to $105.9 billion last month, after a record high in March, Commerce Department data showed on Friday. The figures, which are not adjusted for inflation, compared with a median estimate of a gap of $114.9 billion in a Bloomberg survey of economists.
The Chinese government’s aggressive lockdowns to curb the spread of Covid-19 have complicated the short-term trade picture, with the measures – coupled with Russia’s war in Ukraine – straining already tenuous global supply chains. As the volume of goods arriving at major U.S. ports in April was near record highs, a global acceleration in inflation is testing merchandise trade, with the World Trade Organization slashing its volume growth forecast commodity markets this year.
In the first quarter, the widening trade deficit largely explains the worst performance of the economy since the start of the pandemic recovery, with gross domestic product contracting at an annual rate of 1.5%. Indeed, the value of products that American businesses and consumers have purchased abroad has exceeded purchases of American goods and services by other economies.
A separate report on Friday showed that inflation-adjusted consumer spending in the United States rose in April by the highest level in three months. That, combined with a shrinking trade deficit and higher inventories, suggests economic growth got off to a good start in the second quarter.
US merchandise imports fell 5% from the previous month to $279.9 billion, reflecting declines in industrial supplies and capital goods. Inbound shipments of consumer goods fell 7.9% — the most since March 2016 — to $76.2 billion.
Exports rose 3.1% to a record $173.9 billion in April, boosted by food, capital goods and industrial supplies.
The Commerce Department report also showed that wholesale inventories rose 2.1% in April, while retail inventories rose 0.7%.
More complete April trade figures, including the services balance, will be released on June 7.
© 2022 Bloomberg L.P.