U.S. trade deficit narrowed to $50.1 billion
ASSOCIATED PRESS June 8, 2012 8:16AM
WASHINGTON — The U.S. trade deficit shrunk in April, but only because a big drop in imports offset the first decline in U.S. exports in five months.
The Commerce Department says the trade deficit narrowed 4.9 percent in April to $50.1 billion.
U.S. exports, which had hit a record the previous month, fell 0.8 percent to $182.9 billion. Sales of everything from commercial jetliners to industrial machinery declined.
Imports, which also set a record in March, dropped an even faster 1.7 percent to $233 billion.
The trade gap remains wide and could therefore weigh on growth in the April-June quarter. A wider trade gap slows growth because it means the United States is spending more on foreign-made products than it is taking in from sales of U.S.-made goods.
And the slip in exports is troublesome because it shows the weaker global economy is dampening demand for American-made goods. Export sales declined to Europe, China and Brazil.
Europe’s debt crisis has worsened in recent months and many economists say the region is already in recession. Europe accounts for almost one-fifth of U.S. exports.
In addition Europe’s troubles, growth in emerging market countries, such as China, has been slowing this year.
In March, the deficit increased sharply to $52.6 billion, slightly more than the $51.8 billion initially reported last month. It was the biggest increase in more than a year and dragged on economic growth in the January-March quarter.
Most economists say the U.S. economy is growing at an annual rate of 2 percent to 2.5 percent in the current April-June quarter. That’s slightly better than the 1.9 percent growth in the first three months of the year, but still only modest.