The Bureau of Economic Analysis and the Census Bureau reported that the U.S. trade deficit narrowed from $52.6 billion in March to $50.1 billion in April. Both exports and imports declined, with imports falling by more. The longer-term trend for exports and imports are higher, with April’s levels for both higher than what was observed in February.
This same trend can be found among goods exports, with the March figures a bit of an outlier. The goods trade balanced narrowed to -$64.8 billion in April, down from -$67.5 billion. Some areas of strength for the month were found in foods, feeds and beverages (up $700 million), automobiles and parts (up $424 million) and consumer goods (up $210 million). These were offset, however, by declines in industrial supplies and materials (down $1 billion) and capital goods, excluding autos (down $1.45 billion). Petroleum exports rose from $10.3 billion to $10.5 billion, helping to reduce the petroleum trade deficit to $28.0 billion.
Of course, one of the ongoing storylines has been the economic challenges in Europe and a slowing of global growth overall. This can clearly be seen in these figures. Looking at data which is not seasonally adjusted, the declines in goods exports appear to be widespread. Goods exports to Europe, for instance, declined from $31.6 billion in March to $27.5 billion in April. This time last year, that figure was $36.9 billion, reflecting a significant slowing in activity. Export decreases were also observed in China, North America and South America, but not to such a great extent. The monthly trade deficit with China widened to $24.5 billion, up from $21.7 billion the previous month, as a result of increased imports and fewer exports.
Manufactured goods exports decreased in April, mirroring the larger trends. With that said, exports from manufacturers have generally drifted higher when you look at a longer time horizon. Year-to-date manufactured goods exports are $336.6 billion (not seasonally adjusted), up from $311.1 billion year-to-date in 2011. The primary drivers of this growth have been industrial supplies and materials and capital goods, with positive contributions from motor vehicles and consumer goods.
With that said, slowing international sales are a concern for many manufacturers. Anxieties about the future of Europe and an easing of growth in Asia and South America present challenges for export growth moving forward. Given the importance of trade to manufacturers’ growth strategies, it will be important for us to get the global economy moving again.
Chad Moutray is chief economist, National Association of Manufacturers.