April U.S. trade deficit rises to $60.9 billion on high oil prices
Posted by: admin in Industry NewsFiled under: Industry, Economic data, Commodities, Oil, Agriculture
The U.S. trade deficit rose to $60.9 billion in April, the U.S. Commerce Department announced Tuesday, as the rising cost of imported oil offset gains in goods exported.
Economists surveyed by Bloomberg News had expected the trade deficit to be $59.5 billion. Also, the March trade deficit was revised lower to $56.5 billion from the previously announced $58.2 billion.
In April, imports increased to 4.5% to $216.4 billion, with imported petroleum driving up the total. The United States paid a record $96.81 average price for a barrel of oil during the month. Exports increased 3.3% to $155.5 billion, boosted by sales of commercial aircraft, autos, machinery, and agricultural equipment.
Meanwhile, the nominal April trade deficit, which controls for inflation, fell to $46.9 billion - - its lowest level in about 5 years.
Bad news, Good news
Economist David H. Wang told BloggingStocks Tuesday he’s emphasizing the good news in the report which he argues is the more substantive and telling dimension of the report.
“If you take away oil and control for inflation, we have the ability to see a continued downward track in the trade deficit, led by rising exports,” Wang stated. “As we saw in the February and March trade data, international demand for U.S. goods is a bright spot in our economy. Without it, would will be in a pronounced recession.”
Still, Wang didn’t want to diminish the seriousness of the U.S. energy situation. “Imported oil is an enormous net negative for the U.S. economy. High imported oil prices are eliminating needed disposable income in many income groups, it’s driving up costs across the economy, and it’s of course forcing up the trade deficit. No matter how you slice it, the fact that the U.S. has to import expensive oil is sending the U.S. economy to a place we don’t want to be,” Wang said. “And it’s transferring billions of dollars in GDP that could be kept at home, generating commerce in the U.S. economy.
Wang stated additional declines in the trade deficit will be dependent on whether global growth remains strong, particularly in emerging markets, among other factors.
Economists like that a nation run a trade surplus as opposed to a to trade deficit, as it usually implies that a nation’s goods are competitive on the world stage, its citizens are not consuming too much, and that its amassing capital for future investment and economic goals.
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