US foreign trade deficit collapses in April as exports jump
America's shortfall on trade with the rest of the world registered an outsized drop in April and some economists believed that it was set to stop being a drag on economic growth over the remainder of 2022.
According to the US Department of Commerce, in seasonally adjusted terms the total foreign trade deficit collapsed at a month-on-month pace of 19.1% to reach $87.1bn.
That was better than a preliminary estimate of $89.7bn.
Exports of goods and services jumped by 3.5% on the month to reach $252.6bn while imports fell 3.4% to $339.7bn.
Michael Pearce, senior US economist at Capital Economics, credited stronger shipments of soybeans and civilian aircraft for the jump in exports, together with higher prices for natural gas.
Travel exports also rose thanks to the ongoing rebound in the sector, he said.
He also estimated that in real terms exports were set to grow at an annualised pace of 35% over the three months to June, but imports by only 10%.
That would add two full percentage points to the rate of GDP growth, instead of the 3.9 point drag recorded during the first quarter.
In turn, the risks to Capital Economics´s forecasts for US second quarter GDP growth of 4.8% now lay to the upside.
"Having been a persistent drag over the past 18 months, net trade will be more neutral for growth over the rest of this year."