The trade balance in April improved but on a drop in imports. In April, the U.S. trade gap shrank to $50.1 billion from $52.6 billion in March (originally $51.8.0 billion). The consensus projected a deficit of $49.3 billion. Exports dipped 0.8 percent after a 2.5 percent boost in March. Imports fell 1.7 percent after a 5.2 percent jump the prior month.
The improvement in the trade gap was led by the non-petroleum goods deficit which narrowed to $36.5 billion from $38.0 billion in March. The petroleum goods gap also shrank-to $28.0 billion from $28.6 billion. The services surplus decreased marginally to $14.8 billion from $14.9 billion.
On a not seasonally adjusted basis, the April figures showed surpluses, in billions of dollars, with Hong Kong $3.3 ($3.0 for March), Australia $1.6 ($2.0), Singapore $0.7 ($0.9), and Egypt $0.2 ($0.2) among others. Deficits were recorded, in billions of dollars, with China $24.6 ($21.7), OPEC $11.5 ($9.1), European Union $8.7 ($9.8), Japan $6.3 ($7.1), Mexico $5.4 ($6.1), Germany $4.6 ($5.5), Canada $3.3 ($3.0), Venezuela $2.1 ($2.7) among others.
The April decline in goods exports was led by capital goods excluding autos which fell $1.5 billion after a $1.3 billion gain in March. Also declining in April were industrial supplies. Increases were seen in autos, consumer goods, and in foods, feeds & beverages.
The drop in goods imports in April was led by a $2.0 billion decrease in capital goods excluding autos, following a $3.2 billion jump the month before. Also declining were foods, feeds & beverages, capital goods excluding autos, automotive, industrial supplies, and consumer goods. No major import category gained.
Overall, it is difficult to make much of the latest trade report given the sharp gains in exports and imports in March. The April declines in both exports and imports may be nothing more than monthly volatility coming off March. Or you could say-but with little certainty-that businesses are cutting back on imports due to worries about demand and exports are down on weak global demand. But that is not the story over the two month period. Over two months, the export and import trends are moderately good.
Market Consensus before announcement
SPECIAL NOTE: This report will include annual benchmark revisions to U.S. International Trade in Goods and Services will be released by the Census Bureau along with April 2012 data. Data on trade in goods, on both a Census basis and a BOP basis, and data on trade in services will be revised from Jan 2009 - Mar 2012.
The U.S. international trade gap in March expanded to $51.8 billion from $45.4 billion in February. Exports rose 2.9 percent after a 0.3 percent increase in February. Exports hit a record high. They also have risen four months in a row. Imports rebounded a sharp 5.2 percent, following a 2.8 percent drop the month before. The worsening in the trade gap was led by the non-petroleum goods deficit which ballooned to $38.8 billion from $32.8 billion in February. The petroleum goods gap also grew-to $28.6 billion from $27.6 billion. The services surplus expanded to $15.8 billion from $15.7 billion.