US trade deficit rises to highest level since January

US trade deficit rises to highest level since January

USA demand for foreign-made goods climbed and exports declined, causing the trade deficit to widen in April, which may restrain the pace of economic growth this quarter, Commerce Department data showed Friday.

America's trade shortfall with the rest of the world widened in April although in a positive sign for consumption, demand for imports strengthened.

Economists had expected the trade deficit to widen to USD46.1 billion from the USD43.7 billion originally reported for the previous month.

The Commerce Department said the trade deficit widened to $47.6 billion in April from a revised $45.3 billion in March.

When adjusted for inflation, the trade deficit rose to $63.5 billion from $60.7 billion in March.

In this October 24, 2016, photo, containers wait to be unloaded from a ship at the Port of Baltimore in Baltimore.

Additionally, the Commerce Department said the value of exports fell by 0.3 percent to $191.0 billion in April from $191.5 billion in March.

The trade gaps with China and Mexico have risen while the gap with Germany has only fallen slightly.

"If sustained in May/June, the April level would result in net exports subtracting about 0.5 points from the real GDP growth rate" for the second quarter, Jim O'Sullivan of High Frequency Economics said in a client note. Exports are up 6.1 per cent to $765.6-billion this year, but imports are up more - 7.5 per cent to $952.2-billion.

President Donald Trump recently has singled out Germany for criticism, saying it is unfairly benefiting from a weak euro.

President Donald Trump this week made the USA trade deficit with Germany a bone of contention and the administration is reviewing trade agreements with an eye to correcting imbalances, including renegotiating the landmark North American Free Trade Agreement. When a country's currency is weak, its products enjoy a price advantage in foreign markets.