2023.06.0713:46:00UTC+00U.S. Trade Deficit Widens Significantly As Exports Slump, Imports Jump

A report released by the Commerce Department on Wednesday showed the U.S. trade deficit widened significantly in the month of April.

The Commerce Department said the trade deficit increased to $74.6 billion in April from a revised $60.6 billion in March.

Economists had expected the trade deficit to jump to $75.2 billion from the $64.2 billion originally reported for the previous month.

The trade deficit in April marked the biggest since the deficit reached $78.3 billion in October 2022.

The wider trade deficit came as the value of exports plunged by 3.6 percent to $249.0 billion in April after surging by 1.8 percent to $258.2 billion in March.

The sharp pullback by exports reflected a steep drop in exports of industrial supplies and materials, including crude oil, as well as a notable decrease in exports of consumer goods.

Meanwhile, the report said the value of imports jumped by 1.5 percent to $323.6 billion in April after tumbling by 1.6 percent to $318.8 billion in March.

Imports of automotive vehicles, parts and engines led the rebound, with imports of industrial supplies and materials also showing notable growth.

"Net exports will likely be a drag on Q2 US GDP as resilient consumer spending keep imports elevated," said Matthew Martin, U.S. Economist at Oxford Economics.

He added, "That said, we expect imports to weaken in the months ahead as consumers continue to normalize spending patterns and businesses investment feels the pinch of tighter lending conditions and higher interest rates."

The Commerce Department also said the goods deficit spiked to $96.1 billion in April from $81.6 billion in March, while the services surplus rose to $21.6 billion from $21.0 billion.