The U.S. trade deficit widened significantly in April as exports plunged and imports rose, putting downward pressure on U.S. economic growth but indicating that consumer appetite for goods remains strong.
Exports fell by 3.6 percent in April to $249 billion, led by a decrease in shipments of oil and pharmaceuticals. Goods exports fell by $9.4 billion to $167.1 billion. Exports of services ticked up by $200 million to $81.9 billion, boosted by an increase in international travel services and business services partially offset by declines in financial and government services.
Imports of goods increased $5.2 billion to $263.2 billion. Automotive vehicles, parts, and engines increased $2.0 billion, reflecting a surge in car buying in the U.S. that has also increased domestic vehicle sales. Cell phones and other household goods imports increased $1.7 billion. Imports of services fell, led by a decreases in transportation and travel services.
Larger deficits subtract from gross domestic product. Over the last two years, large swings in the trade deficit have been major contributors to volatility in this official scorecard of the U.S. economy.
Imports are expected to weaken in the months ahead as consumer spending decreases and continues to shift to domestic services from goods.
A stronger dollar makes exports more expensive abroad and imports cheaper in the U.S., encouraging growth of the trade deficit.
The largest trade deficit was with China, where the gap was $24.2 billion in April.
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