The U.S. Commerce Department, within the past hour, reported a moderate widening in the nation's international trade imbalance, when it issued data showing that exports had come in at $187.4 billion during April, while imports were at $227.7 billion over that same month.
That worked out to a deficit of $40.3 billion, which although less than the consensus estimate of $41.4 billion, was still notably higher than the downwardly revised shortfall recorded in March of $37.1 billion. This latter figure had been estimated initially at a somewhat larger $38.8 billion.
In sum, exports came in during April at $2.2 billion more than in March, but imports really surged, jumping by $5.4 billion for the latest reporting month. As the nation's gross domestic product is defined as all of the goods and services produced in this country, plus exports minus imports, this increase in the deficit should further pressure GDP in what shapes up to already likely be a weaker second quarter than seen during the initial stanza of 2013.
Meanwhile, the trade report showed an increase in exports of consumer goods, capital goods, and automotive vehicles, parts, and engines. Decreases occurred in industrial supplies and materials. At the same time, imports of consumer goods, automobiles and parts also rose in April, thus contributing to the widening shortfall.
Essentially, this report was not a headline grabber, and should not sway economists in their view of the current quarter. As before, we suspect that GDP growth in the present three months will materially trail the downwardly revised 2.4% gain inked during the first quarter, with the expansion perhaps slowing to the 1.0%-2.0% range. Thereafter, we would look for a slight firming in growth after midyear into the 2%, or slightly higher, range.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.