The U.S. international trade deficit worsened for April, jumping to a two-year high as exports declined and imports surged to a record level, according to a Commerce Department report (link opens in PDF) released today.
The total deficit expanded 6.8% from the previous month, to $47.2 billion, dashing analyst expectations of a 6.6% improvement to $41.3 billion.
Deficits improve in two ways: (1) exports increase more than imports, or (2) imports decrease more than exports. The first scenario is generally favored over the second, as it more directly shows signs of an internally strengthening economy. April's results show the worst of both, where the combination of a $0.3 billion exports dip to $193.4 billion and a $2.7 billion imports rise to $240.5 billion put trade well off March's numbers.
Diving deeper into sectors, the services trade surplus improved another $0.2 billion to reach $18.6 billion as financial services and transport each added on $100 million in exports.
While services soared, goods continued to create trouble for America's international trade. The goods deficit worsened $3.3 billion to $65.8 billion through a combination of fewer exports and more imports. Exports for capital goods and foods, feeds, and beverages both fell $0.3 billion, while consumer goods imports soared $1.1 billion.
The U.S. currently enjoys its largest trade surplus for goods with Hong Kong ($2.7 billion), while a $27.3 billion China deficit helps keep U.S. trade numbers in the red. America's trade gap with China jumped 33.7% in April, the largest gap since January. The U.S. deficit with China is the largest with any country, and this year's imbalance is running ahead of last year's record pace.
-- Material from The Associated Press was used in this report.