US Trade Deficit Expands 16.7% In April

The U.S. Commerce Department reported Thursday that the national trade deficit expanded 16.7% to $49.4 billion in April. Economists had forecasted $49 billion flat.

What Happened

Exports fell a record 20.5% to a 10-year low ($151.3 billion) as lockdowns disrupted production and travel. Goods declined 25.2% to $95.5 billion, with motor vehicles and car parts striking their lowest levels since March 1992. Consumer goods exports hit 2006 levels, and the services surplus shrunk to its smallest rate since December 2016 ($22.4 billion).

Imports fell 13.7% to the lowest rate since July 2010 ($200.7 billion), with goods dropping 13.6% to $167.4 billion.

Why It’s Important

The trade figures add to a series of dismal economic reports released over the last few weeks. The International Monetary Fund recently predicted that the U.S. economy will contract 5.9% in 2020, with the global economy shrinking 3%.

The declines were largely attributable to lockdowns and economic halts related to the coronavirus, but to some extent, they built on trends that predated the pandemic: imports had been declining due to the trade war with China, and developments in the domestic oil industry had transitioned the U.S. into an oil export role.

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