U.S. Trade Deficit Narrows; Business Returns to Normal on the West Coast

The U.S. foreign trade deficit in goods and services narrowed to $40.9 billion during April following a surge to $50.6 billion in March, revised from $51.4 billion. A deficit of $44.1 billion had been expected in the Action Economics Forecast Survey. In constant dollars, the trade deficit improved to $57.2 billion from $66.4 billion. Exports of goods rose 2.4% (2.3% y/y) while goods imports declined 3.4% (+4.4% y/y).

Imports declined 3.3% (-3.6% y/y) following a 6.5% March jump, prompted by the resolution of the West Coast labor dispute. Nonpetroleum imports declined 4.3% (+2.7% y/y) as nonauto consumer goods imports fell 9.0% (+4.0% y/y). Auto imports declined 1.3% (+6.0% y/y) and industrial supplies imports were off 1.5% (-27.4% y/y). Capital goods imports fell 1.2% (+6.0% y/y) while imports of foods, feeds & beverages eased 0.6% (+2.3% y/y). Services imports slipped 0.8% (+4.4% y/y) as transportation imports fell 6.2% (+4.3% y/y). Travel imports gained 1.5% (7.7% y/y).

Petroleum imports gained 1.1% (-48.2% y/y) following several months of sharp decline with lower crude oil prices. In constant dollars, petroleum imports rose 1.1% (-1.8% y/y). The average per barrel cost of crude oil was fairly steady at $46.52 (-51.3% y/y), near the lowest level since March 2009. The value of energy-related petroleum product imports increased 3.6% (-49.2% y/y) as their quantity rose 2.8% (-0.9% y/y).

Overall exports improved 1.0% (-2.6% y/y) as goods exports jumped 1.7% (-4.6% y/y). Capital goods exports surged 4.6% (3.1% y/y). Exports of industrial supplies & materials rose 1.8% (-12.0% y/y) and auto exports gained 1.3% (-3.1% y/y). To the downside, foods, feeds & beverage exports were off 1.7% (-11.6% y/y) and consumer goods exports fell 0.5% (-2.2% y/y). Services exports were unchanged (2.4% y/y) and travel exports improved 0.3% (2.7% y/y).

By country, the trade deficit in goods with China narrowed to $26.5 billion. Exports rose 3.2% y/y while imports declined 1.5 y/y. The deficit with Japan remained stable at $7.1 billion as exports recovered 5.7% y/y and imports gained 12.1% y/y. The trade deficit with the European Union rose deepened to $13.3 billion. Exports rose 1.1% y/y and imports declined 0.8% y/y.

The international trade data can be found in Haver's USECON database. Detailed figures are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey, which is carried in the AS1REPNA.