US trade deficit slightly higher than forecast in April, March revised up

America's shortfall on trade with the rest of the world shrank slightly in April amid a decline in both exports and imports.

According to the Department of Commerce, in seasonally adjusted terms the total trade deficit in goods and services narrowed by 2.1% month-on-month to reach $50.8bn.

The consensus forecast had been for a print of -$50.5bn.

However, the March deficit was revised higher by $1.9bn.

In comparison to March, exports of goods and services declined by 2.2% to $206.8bn, and imports by another 2.2% to $257.6bn.

The bulk of the reduction in the deficit came from the balance in trade on goods, which fell by $1.0bn to $71.7bn, while the services surplus grew by $0.1bn to $20.9bn.

Exports of civilian aircraft were especially weak, dropping by $2.3bn, while those of autos and parts decreased by $0.8bn.

Imports of goods meanwhile fell by $5.4bn to $208.7bn, with those of semiconductors and gem diamonds declining by $0.9bn and $0.7bn, respectively.

Versus a year ago, the trade deficit was little changed, having increased by $1.2bn over the three months to April.

According to Ian Shepherdson, chief economist at Pantheon Macroeconomics, trends are that "core exports are about flat, while imports are rising slowly."

"The key point, though, is that the drop in the deficit in Q1 was more a case of mean reversion after the tariff-distorted increase in H2 last year, rather than some sort of one-time fluke which will quickly reverse.

"The deficit likely will increase over the next few months, but trade now seems very unlikely to be a big drag on Q2 GDP growth. Expect “tracking models”, aka forecasts, to be revised up a bit."