Fewer oil imports and strong demand for American goods and services drove the U.S. trade deficit down nearly 7 percent in April, providing a break from a recent string of economic news that had called into question the pace of the nation’s fragile economic recovery.
The $43.7 billion shortfall is down from $46.8 billion in March, according to figures released Thursday by the Department of Commerce. Imports stood at $219.2 billion while exports totalled $175.6 billion, according to the data.
Many economists had forecast the deficit to widen, with one consensus forecast pinning the April deficit at $48.8 billion.
The economic news wasn’t all good, as initial jobless claims edged up to 427,000 from 426,000 last week, according to data released by the Department of Labor.
But markets brushed off the jobless figures, with the Dow Jones industrial average up 0.6 percent Thursday and the Standard & Poor’s 500-stock index, a broader measure of the market, rising 0.7 percent. The gains broke a string of losses precipitated by weak manufacturing and unemployment data released last week.
Commerce Secretary Gary Locke said in a statement that export growth was boosted by President Obama’s National Export Initiative. The initiative aims to double U.S. exports in five years through trade promotion, advocacy and other pro-trade policies.
Exports have grown nearly 18 percent since Obama launched the program in March 2010, though the trade deficit widened over the same time period as imports continued to climb.
“It’s always hard to credit a particular month to an initiative,” said Gregory Daco, principal U.S. economist for IHS Global Insight, a forecasting company. Daco attributed April’s strong exports to the historically weak dollar — which makes U.S. goods and services cheaper on the global markets — and strong demand from emerging markets.
The largest emerging market, China, continued to account for nearly half of the U.S. trade deficit.
But weaker imports also helped narrow the trade deficit. Crude oil imports tumbled 8.6 percent from March to April, and automobile import dropped 2.9 percent. Economists blamed the latter on the March earthquake in Japan, which disrupted auto manufacturing and other industries.
“That was unexpected,” said Troy Davig, senior U.S. economist at Barclays Capital. “We hadn’t really built in potential for supply chain disruptions of that magnitude.”
With the disruptions gradually easing, Davig predicts April’s decrease in the trade deficit will slowly taper away.
“I think there will slow payback over the next six months,” he said.