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US April Trade Gap Widens

FILE: A semi-trailer truck hauling a container leaves the Port of Los Angeles Monday, Feb. 23, 2015. The port is a major terminal for U.S. global trade.

WASHINGTON - The U.S. trade deficit grew in April on a pullback in exports, bringing the gap to its widest since October 2022, according to government data released on Wednesday.

April's U.S. overall trade deficit was $74.6 billion, expanding slightly less than expected by $14 billion, according to Commerce Department data.

Exports that month fell by $9.2 billion to $249 billion, while imports edged up by $4.8 billion to $323.6 billion.

The slide in exports came on the back of a decrease in value of goods shipments, such as crude oil and fuel oil, along with some consumer goods.

Imports of goods picked up with support from auto vehicles and parts, as well as some industrial supplies and materials.

The U.S. goods deficit with China stood at $24.2 billion in April.

"Net foreign trade often is sidelined in discussions of headline GDP growth, but it has been a huge swing factor since COVID-19," said Pantheon Macroeconomics economists Ian Shepherdson and Kieran Clancy in a recent report.

They added that weakening in foreign trade will likely be "accompanied by a further drag from the inventory component, and a steep drop in investment in business equipment, making an outright drop in headline GDP more likely."

But imports are likely to weaken in the months ahead, according to economist Matthew Martin of Oxford Economics, as consumer strength declines and "businesses investment feels the pinch of tighter lending conditions and higher interest rates."

Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said in a note: "After rising to all-time highs, overall trade flows have slowed."

Echoing Martin, Farooqi said "A weaker trend could persist owing to the effects of monetary policy tightening around the globe which is adding to economic uncertainty domestically and abroad."