WASHINGTON — The U.S. trade deficit narrowed in April as imports fell sharply, reflecting a subdued appetite for foreign goods and materials by U.S. consumers and businesses.
The goods and services trade deficit fell 19.1% in April from the previous month to a seasonally adjusted $87.1 billion, the Commerce Department said Tuesday, narrowing from a record deficit of 107 .7 billion from March.
Imports fell 3.4% to $339.7 billion, the first month-on-month decline since July last year, driven by a drop in clothing, household goods, toys, pharmaceuticals and finished metals. Exports continued their upward trend in recent months, rising 3.5% to $252.6 billion.
Economists polled by The Wall Street Journal had estimated a trade deficit of $89.4 billion for April.
The fall in imports represents a dramatic change from the trend of previous months when companies increased inventories at a brisk pace following prolonged supply chain disruptions triggered by the Covid-19 pandemic. It also came amid cooling commodity markets after the sharp price increases caused by Russia’s invasion of Ukraine. Meanwhile, consumer demand for goods and services remained solid in April despite high inflation in the United States.
As oil prices in global markets continue to rise on fears of shortages caused by tougher sanctions on Moscow, the price of Brent fell to $100 a barrel in early April from a high of nearly $130. dollars in early March, according to Wall Street Journal data.
Meanwhile, exports continued to grow in April, driven by a strong increase in food shipments, as well as a strong performance in industrial supplies and capital goods, natural gas and petroleum products, foods like soybeans and civil aircraft. Still, the trade deficit in April remains large compared to pre-pandemic levels. This reflects the strength of the U.S. economy relative to other developed countries, a dynamism that economists expect to see continue in the coming months.
The International Monetary Fund expects the US economy to grow by 3.7% this year, much faster than 2.8% for the euro zone and 2.4% for Japan. Chinese growth, meanwhile, is expected to slow to 4.4% this year from 8.1% last year, according to the IMF’s April forecast.
Before the pandemic, the trade deficit had fluctuated for years between $40 billion and $50 billion a month.
Services exports increased, reflecting higher spending by foreign tourists in the United States
—Anthony DeBarros contributed to this article.
Write to Yuka Hayashi at [email protected]
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