US trade deficit at two-year high in April: Commerce Dept.
By Martin Crutsinger ,AP
June 5, 2014, 12:00 am TWN
WASHINGTON -- The U.S. trade deficit jumped to a two-year high in April, as exports declined and imports surged to a record high.
The deficit rose to US$47.2 billion in April, up 6.9 percent from an upwardly revised March deficit of US$44.2 billion, the Commerce Department said Wednesday.
Exports dropped for the fourth month out of the past five, falling 0.2 percent to US$195.4 billion. Meanwhile, imports climbed 1.2 percent to an all-time high of US$240.6 billion, reflecting record shipment levels of foreign-made cars, food, computers and other goods.
A wider trade deficit can act as a drag on growth because it means U.S. companies are earning less from their overseas markets. But it can also indicate rising U.S. demand. Economists were likely to see the big jump in imports as a good sign that the country is shaking off the effects of a harsh winter.
In 2013, the trade deficit declined by 11.4 percent to US$476.4 billion. The result was led in part by a boom in U.S. energy production that cut America's dependence on foreign oil while boosting petroleum exports to a record high.
A larger trade gap in the first three months of this year compared to the fourth quarter shaved nearly a full percentage point from growth, helping to push the economy into negative territory. The gross domestic product shrank at an annual rate of 1 percent in the first quarter, hurt by the higher trade deficit, less business stocking of store shelves and a severe winter that disrupted consumer spending and factory production.
Economists expect a strong bounce back in the current April-June quarter. Some estimate that growth could hover around 3.8 percent as the trade deficit narrows and stronger hiring boosts household incomes and consumer spending. However, the bigger-than-expected trade deficit in April may cause analysts to trim those forecasts a bit.