April 2018 Trade Deficit
Submitted by Atlas Indicators Investment Advisors on June 14th, 2018
International trade in goods and services improved in April 2018 according to the Bureau of Economic Analysis. They estimate the trading deficit shrank $1.0 billion to $46.2 billion after March’s tally was revised from the original shortfall of $49.0 billion. Year-to-date, America’s trade deficit is up 11.5 percent or $20.8 billion to $201.7 billion.
Data in the release were mixed. Take cell phones for instance, America imported $2.2 billion less of them than in March, helping to offset the consumer-goods shortfall. However, the deficit with China (rising $2.1 billion) nearly offset the cell phone improvement. Passenger car imports declined $1.0 billion, while industrial supplies and materials imports (like crude oil) increased $1.2 billion. Even imported services increased, rising $300 million to $47.9 billion
Export goods and services both increased. Industrial supplies and materials increased $1.3 billion. Likewise, foreign buyers purchased $700 million more of foods, feeds, and beverages, led by corn and soybean. However, capital goods exports decreased, falling $1.4 billion as civilian aircraft orders declined. Exports of services managed to grow $300 million with the financial services and intellectual property sub-categories increasing $100 million each.
April’s narrowing trade deficit will help the gross domestic product arithmetic for the second quarter. Net exports are added to the other three broad categories of output: consumption, capital investment, and government outlays. Net exports have been negative since the late 1970s, so this improvement to start the second quarter will alleviate some of trade’s burden on the official GDP statistic.