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US trade deficit increases less than expected in April
[WASHINGTON] The US trade deficit increased less than expected in April as exports of goods rebounded strongly, suggesting that trade would be a boost to economic growth in the second quarter.
The Commerce Department said on Friday the trade gap rose 5.3 per cent to US$37.4 billion. March's trade deficit was revised down to US$35.5 billion, which was the smallest since December 2013, from the previously reported US$40.4 billion.
The government revised trade data going back to 2013. Economists polled by Reuters had forecast the trade deficit rising to US$41.3 billion in April.
When adjusted for inflation, the deficit widened to US$57.6 billion from US$56.1 billion in March.
The trade deficit for April was smaller than the monthly average for the first quarter, suggesting trade will probably contribute to gross domestic product in the April-June period. Trade has been a drag on GDP growth over the last three quarters.
In April, exports of goods increased 2.5 per cent to US$120.1 billion. Exports have been undercut by a strong dollar and sluggish global demand. With the dollar's rally ebbing and US-made goods becoming more competitive on international markets, some of the weight on exports is starting to lift.
Overall exports of goods and services rose 1.5 per cent to US$182.8 billion in April. Exports to the European Union fell 6.0 per cent, while goods shipped to Canada increased 1.1 per cent. Exports to China fell 3.2 per cent.
Imports of goods rose 2.4 per cent to US$178.9 billion in April, pointing to a pick-up in domestic demand. Part of the increase reflected a rise in oil prices. Oil prices averaged US$29.48 per barrel in April, up from US$27.68 in March. The petroleum trade deficit was the smallest since February 1999.
Imports from China surged 10.5 per cent. With exports falling, the politically sensitive US-China trade deficit increased 16.3 per cent to US$24.3 billion in April.