US trade balance narrows sharply in April
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The U.S. trade balance narrowed sharply to a deficit of $68.9 billion in April, as exports rose $2.3 billion and imports fell $3.8 billion.
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Exports were boosted by capital goods exports, reflecting a pickup in civilian aircraft exports. Imports were held back by a 3.9% decline in consumer goods imports.
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Autos trade continued to be weak in April, reflecting ongoing supply problems within the sector.
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Services trade continued to recover and should more meaningfully pick up as the service sector reopens.
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The April trade report suggests net exports likely will provide a modest boost to second-quarter GDP growth. The U.S. trade balance narrowed sharply to a deficit of $68.9 billion in April after reaching a record deficit of $75.0 billion in March. Exports rose $2.3 billion, while imports fell $3.8billion. April's report suggests net trade will likely provide a modest boost to second-quarter GDP growth.
Goods exports outpace imports
The goods trade deficit narrowed by $6.2 billion in April, the most since early 2019. Goods exports rose 1.1%, boosted by a 4.9% gain in capital goods ex-automotive exports, where civilian aircraft accounted for a majority of the gain, in part refiecting renewed demand for travel.
Goods imports slipped 1.9% and were held back by a 3.9% drop in consumer goods. Consumer goods imports still remain about 25% ahead of where they were prior to the crisis in February 2020. As U.S.consumer spending transitions back to the much larger services category, consumer import growth may subside further. But as businesses still need to replenish exceptionally lean inventory levels, we expect consumer goods imports will remain elevated.
Autos & parts trade continued to be a source of weakness for both exports and imports in April reflecting ongoing supply constraints in the sector. After exceeding pre-pandemic levels late last year, auto imports have now slid almost 4% below where they were in February 2020. Imports of semiconductors slipped $749 million, while exports rose $305 million.
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