- The U.S. trade deficit decreased to $68.9 billion in April from $75.0 billion in March. Total exports (goods and services) increased by 1.1% (+7.5% in March), while imports went down by 1.4% (+7.1% in March).
- Goods exports increased by 1.1% in April (+10.1% in March). Capital goods (4.9%), foods, feeds & beverages (2.0%) and industrial supplies (1.6%) registered the largest increases in April. Accounting for price changes, real goods exports expanded by 0.3%.
- Goods imports decreased by 1.9% (compared to +7.7% in March). Most product categories registered losses, with other goods (8.0%) and consumer goods (3.9%) seeing the biggest drops compared to March. Excluding price changes, real imports decrease by 2.7% in April.
- Meanwhile, exports of services expanded by 1.2% (+1.5% in March) for the month, while imports grew by 1.8% (+4.0% in March).
Key Implications
- The monthly trade deficit in goods and services decreased for the first time this year. Still, exports are down 2.5% from April 2019. Meanwhile, imports are now 5.2% higher than two years ago.
- Delving deeper into the data reveals the services sector still struggling to come to terms with the pandemic. Services exports are still 18.2% lower than April 2019. Despite improving on the month, the recovery in services trade is more susceptible to the rise in cases than goods trade.
- Despite massive fiscal stimulus, we expect the stop-and-go trend in U.S. trade to continue. Vaccine administration has slowed down in the U.S. and cases are still elevated across several American trading partners. It will take several months before restrictions are fully eased, either in the U.S. or abroad. Until then, the trade recovery (particularly services trade) will remain uncertain.
