US Trade Imbalance Widens in April, Driven by Goods Deficit Increase

Highlights

• U.S. goods and services deficit increased by $14.0 billion in April.
• Year-to-date deficit decreased by $86.5 billion or 23.9 percent.
• Average goods and services deficit rose to $68.5 billion for the three months ending in April.

Overview

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis have announced that the goods and services deficit in the United States was $74.6 billion in April, which is an increase of $14.0 billion compared to March, after revision. The April figure was better than the estimated deficit of $75.8 billion. The goods deficit drove the deficit increase, rising by $14.5 billion to reach $96.1 billion, while the services surplus increased by $0.6 billion, totaling $21.6 billion.

Year-to-Date Decrease

In terms of year-to-date data, the goods and services deficit decreased by $86.5 billion or 23.9 percent compared to the same period in 2022. Exports increased by $55.9 billion or 5.8 percent, while imports decreased by $30.6 billion or 2.3 percent.

Average Deficit Rises, Exports Decrease

Looking at the three-month moving averages, the average goods and services deficit increased by $1.5 billion to $68.5 billion for the three months ending in April. Average exports decreased by $3.4 billion to $253.6 billion, while average imports decreased by $1.9 billion to $322.1 billion. Comparing the average deficit to the same period in the previous year, there was a decrease of $23.4 billion.

Goods Exports Decline, Services Increase

In April, goods exports amounted to $167.1 billion, reflecting a decrease of $9.4 billion. This decrease resulted from declines in industrial supplies and materials, consumer goods, and net balance of payments adjustments. Conversely, services exports increased by $0.2 billion, primarily driven by growth in travel and other business services, despite a decrease in financial services and government goods and services.

Goods Imports Rise, Services Decrease

On the import side, goods imports in April amounted to $263.2 billion, an increase of $5.2 billion. The increase was driven by higher imports of automotive vehicles, parts, and engines, industrial supplies and materials, and consumer goods. Import of services decreased by $0.4 billion, mainly due to declines in transport and travel services.

Inflation-Adjusted Goods Deficit Grows

In real terms, adjusted for inflation, the real goods deficit increased by $13.6 billion or 16.5 percent to $95.8 billion in April, compared to a 17.7 percent increase in the nominal deficit. Real exports of goods decreased by $8.1 billion or 5.6 percent, while real imports of goods increased by $5.5 billion or 2.4 percent.

Important to note: The data for exports and imports of goods and services through March 2023 underwent revisions to incorporate annual series revisions, affecting exports, imports, and services in both directions.