The Commerce Department said on Friday the U.S. trade deficit rose 5.3% to $37.4 billion in April, unexpectedly narrowing to $37.4 billion. Economists were looking for the U.S. trade deficit to grow to $41.3 billion.
March’s deficit was revised lower to $35.5 billion, which was the smallest since December 2013. In fact, the government revised trade data going back to 2013. The U.S. trade deficit in April was now smaller than the monthly average for the first quarter, indicating it will likely contribute positively to gross domestic product in the April-June period. Until now, trade overall has been a drag on GDP growth, that is, at least over the last three quarters.
Exports of goods and services overall increased by 1.5% to $182.8 billion in the month of April. However, exports to the European Union fell 6.0% and to Canada gained 1.1 %. Exports to China fell 3.2%.
Imports of goods overall increased 2.4% to $178.9 billion, though a large part of the increase reflected a rise in oil prices. Oil prices averaged $29.48 per barrel in April, which is up from $27.68 in March. The petroleum trade deficit was the smallest since February 1999.
Imports from China skyrocketed by 10.5% even as exports continued to fall. As a result, the politically sensitive U.S.-China trade deficit increased 16.3% to $24.3 billion in April.