- POSTED: 04 Jun 2014 22:23
- UPDATED: 05 Jun 2014 00:44
A gain in imports against fairly flat exports pushed the US trade deficit higher for the fifth straight month in April, the Commerce Department said on Wednesday.
WASHINGTON: A gain in imports against fairly flat exports pushed the US trade deficit higher for the fifth straight month in April, the Commerce Department said on Wednesday.
The deficit hit a two-year high of US$47.2 billion, up US$3.1 billion in the month and up US$6.8 billion from April 2013.
A US$1.2 billion increase in cell-phone imports over March was the main driver behind the 1.2 per cent rise in overall imports, to US$240.6 billion.
Exports, meanwhile, fell a slight 0.2 per cent in April to US$193.3 billion.
The data showed the US push to boost exports stalling, in part due to the weaker economic growth in China and Europe.
But given the US economy's contraction in the first quarter at a 1.0 per cent annual pace -- partially caused by the severity of the winter weather -- expectations were that April might signal a rebound in growth, with little deterioration in the trade balance.
Instead, for the first four months of the year, the deficit hit US$174.1 billion, up 7.9 per cent from a year ago.
Exports for the first four months were higher than a year earlier, but lower than the last four months of 2013.
"As domestic demand has rebounded from the weather-related slump, so did imports," said Harm Bandholz of UniCredit.
He pointed to the strong auto sales last month across the country, which requires higher levels of imported components.
"Similarly, imports of other consumer goods went up strongly for the second straight month, as did imports of capital goods," said Bandholz.
"At the same time, exports have trended sideways since the beginning of this year. The result is the widest trade deficit in years."
The country's two largest bilateral trade relationships -- with China and with Europe -- suffered in the April data.
The deficit in trade in goods with China jumped to US$27.3 billion from US$20.4 billion in March, and the shortfall with the European Union rose to US$14.0 billion from US$11.5 billion.
But for the first four months of the year, compared with the same period last year, the data showed the rise in the deficit with the European Union has had more impact on the overall US trade balance.
For January-April 2014, the goods trade shortfall with China was US$96.4 billion, up US$3 billion from a year ago.
Meanwhile the goods shortfall with the EU grew by US$7.7 billion to US$47.7 billion in the same period.
Washington is pressing to get US products better-accepted in both, with limited success.
China continues to keep its renminbi currency undervalued, US officials say, arguing it should be stronger against the dollar, which would make US products more competitive.
With Europe, the United States is in the middle of negotiating the Transatlantic Trade and Investment Partnership, an ambitious free-trade and investment zone that Washington hopes will gain more access for US exports in the European market.
The poor April trade data is likely to drag on the US economy's second quarter rebound from the first-quarter contraction, economists said.
But Ian Shepherdson of Pantheon Macroeconomics, in a research note, said the gain in imports is likely "unsustainable" given the slow growth in US domestic demand. "Exports should rally in May/June," he said.