US trade deficit widens to two year high in AprilWednesday 04 June 2014 17.58
The US trade deficit widened to its highest level in two years in April as imports hit a record high, suggesting trade could be a drag on second quarter growth.
The Commerce Department said the trade gap increased 6.9% to $47.2 billion. That was the largest since April 2012 and followed March's revised $44.2 billion gap.
Economists polled by Reuters had expected the deficit to widen only to $40.8 billion from a previously reported $40.4 billion shortfall.
When adjusted for inflation, the deficit increased to $53.8 billion from $50.9 billion in March. Trade subtracted almost a percentage point from first-quarter gross domestic product.
The US economy contracted at a 1% annual pace in the first three months of the year.
Imports increased 1.2% to an all-time high of $240.6 billion in April. Imports of cars, capital goods, food and consumer goods all hit record highs in April.
The trade deficit with the European Union was the largest on record, as was the gap with Germany.
Imports from South Korea also touched a record high, while Chinese imports rose 16.3%. That pushed up the politically sensitive trade gap with China to $27.3 billion from $20.4 billion in March. Exports slipped 0.2% to $193.3 billion.
Meanwhile, the US private sector created out a net 179,000 new jobs in May, a disappointing fall from April, payrolls company ADP said today. It was the lowest level in four months, and suggested US economic growth remains in second gear.
The May figure was down 36,000 positions from April's total, with a sharp slowdown in the number of new jobs coming in the professional and business services sector. Hiring remained slow, as well in trade and transportation, and in construction.