U.S. trade deficit narrows slightly from record levels as Covid-era demand for imports lets up
- The U.S. trade deficit fell to $68.9 billion in April after hitting a record the month before.
- Declining appetite for consumer goods led the decline and closed the trade gap with China.
Americans' demand for imports abated in April, easing the U.S. trade deficit from the record level it had hit the month before, according to Census Bureau data released Tuesday.
The goods and services shortfall declined to $68.9 billion for the month, down from the upwardly revised $75.02 billion in March, the highest level for a data series that stretches back to January 1992.
While exports increased 1.1% to $205 billion, imports declined 1.4% to $273.9 billion, which equated to an 8.2% decline in the trade deficit.
Even with the monthly decrease that still left the trade imbalance 30% higher than the year-ago level, a time when the U.S. economy largely remained in shutdown mode due to harsh restrictions imposed on businesses in an effort to control the Covid-19 pandemic.
Government bond yields fell following the trade news, with the benchmark 10-year note most recently trading at 1.53%, approaching its lowest since mid-April.
A declining appetite for imported consumer goods led the import decline. That category fell by $2.6 billion, driven largely by a $1.7 billion drop in cell phones and other household goods.
Automotive vehicles, parts and engines also decreased $1.1 billion at a time when a semiconductor shortage has hampered production and caused shutdowns at some plants.
Services imports actually increased $700 million for the month, thanks to boosts from travel and transport.
The China trade deficit fell to a $32.4 billion after surging 22% in March.
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