US April trade deficit points to slowing demand, economists say

The US recorded a considerably smaller than expected trade deficit in April, but the details of the report triggered worries about economic growth among some economists.

America´s short-fall in trade with the rest of the world rose from a downwardly revised -$35.5bn in March to -$37.4bn in April, according to data from the Department of Commerce.

That was considerably less than the $41.9bn deficit which economists had penciled in.

March´s figure was revised lower by $4.9bn.

In nominal terms, total exports grew by 1.5% month-on-month and imports by 2.1%.

Significantly, in real terms imports bounced back by 2.2% over the month in April, after a 5.3% drop in the month before.

“Despite better implied GDP growth, we find the softness in goods imports somewhat of a concern. Many consumption and investment goods in the US are sourced from abroad, and a slowing in real import demand can, at times, signal slowing domestic demand.

“We will be closely watching the evolution of business and consumer goods imports in the coming weeks and months for further indications of where real demand is heading,” wrote Barclays´s Jesse Hurwitz.