The global economic slump has stalled the United States' progress in closing its trade deficit.
After falling in February to lows not seen in a decade, the deficit climbed for the second month in a row and stood at a seasonally adjusted $29.2 billion in April, the Commerce Department reported Wednesday. The widening gap was caused by a $2.6 billion fall in US exports of goods, which outpaced a 1.7 percent decline in US imports of foreign goods.
The trade deficit rose 2 percent from March to April and has risen 12 percent since February's low, although it remains at half the level of a year earlier. While America's exports of services have held up relatively well in the global recession – down only 10 percent from a year earlier – exports of goods have fallen 27 percent in the same period.
At first blush, Wednesday's report suggests that America's trade position is deteriorating again. But it was largely driven by the rebound in the value of oil imports, writes Paul Dales, US economist for Capital Economics in Toronto.
Even if oil prices rise, it's unlikely to move the deficit back to the levels of a year ago, he adds. "The outlook for the trade position is still much better than it has been for some time."
In coming months, imports won't fall at the same dramatic place, but the declines in exports will moderate also, writes Joshua Shapiro, chief US economist of MFR, Inc. in New York. "The net effect should be a continued trend improvement in the real net export deficit," albeit at a slower pace than the dramatic narrowing that has happened in the last year.