Trade deficit narrows in April to $43.7 billion
WASHINGTON (AP) — American companies sold more computers, heavy machinery and telecommunications equipment in foreign markets in April, pushing exports to a record high. Imports declined, reflecting a big drop in auto imports from Japan caused by supply disruptions from the March earthquake and tsunami.
The U.S. trade deficit narrowed by 6.7 percent in April to $43.7 billion, the lowest level since December, the Commerce Department reported Thursday.
Exports of U.S. goods and services rose 1.3 percent to a record $175.6 billion. Imports dipped 0.4 percent to $219.2 billion as imports from Japan plunged 25.5 percent.
The trade deficit with China jumped 19.4 percent to $21.6 billion, a development likely to increase pressure to crack down on Chinese trade practices seen by U.S. critics as unfair to American workers.
So far this year, the deficit is running at an annual rate of $553.4 billion, up 10.6 percent from last year's deficit of $500 billion. Economists believe that the deficit will widen slightly this year but not act as a significant drag on trade as a continued boom in exports will help offset higher imports. A higher trade deficit subtracts from overall economic growth because it means more goods and services are being supplied by foreign workers rather than produced in the United States.
For April, oil imports fell 5.5 percent to $36 billion as the volume of petroleum shipments 11.4 percent. That was enough to offset a rise in the average price of a barrel of crude oil, which jumped to $103.18 in April, an increase of $9.42 over the average price in March. That was the biggest one-month increase in nearly three years.
The weaker value of the dollar has made U.S. goods cheaper and thus more competitive in many overseas markets but U.S. manufacturers contend that China is keeping its currency undervalued against the dollar as a way of gaining trade advantages.
The Obama administration has been pressuring China to allow its currency to rise at a faster rate against the dollar. But last month, the administration once again refused to name Chin as a currency manipulator in a report it is required to submit to Congress every six months.