The U.S. trade deficit ballooned by $14 billion in April compared to March as exports fell sharply and imports increased, according to the Bureau of Economic Analysis (BEA) on Wednesday.
The April trade deficit was the biggest in six months as it expanded 23% to $74.6 billion, as exports declined $9.2 billion from March, according to BEA data. Imports rose $4.8 billion to $323.6 billion in April as automotive vehicles, parts and engines increased $2 billion.
The U.S. recorded a $24.2 billion deficit with China, $17.3 billion with the European Union and $13 billion with Mexico as well as smaller deficits with many other countries, according to the BEA. Fossil fuel exports crashed as crude oil fell by $2.1 billion and fuel oil by $1.3 billion.
The growing trade deficit indicates trade will negatively impact second-quarter gross domestic product (GDP), accordingto Bloomberg.
“The terms of trade are worsening and this will bring down second-quarter estimates of real GDP growth closer to the 1% stall speed where bad things can happen and the economy can stumble and go over the cliff,” FWDBONDS chief economist Christopher Rupkey told Reuters.
Trade did not add to the economy’s 1.3% GDP in the first quarter of 2023, breaking a three-quarter streak of trade contribution, according to Reuters.
The U.S. trade deficit was $948.1 billion in 2022, which was the highest ever, according to the Census Bureau. It was $103 billion more than 2021, according to the BEA.
The U.S. economy is projected to slow to 1.1% growth in 2023, according to a World Bank report on Tuesday.
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