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U.S. trade deficit drops 6.7% in April

Jun 10, 2011 Trade

The U.S. current account trade deficit fell 6.7 percent to 43.7 billion dollars in April, the lowest level since December 2010, the Commerce Department reported Thursday.

The current account is the broadest measure of foreign trade because it measures not only trade in goods and services, which are tracked by the government on a monthly basis, but also investment flows between countries.

In April, exports of U.S. goods and services rose 1.3 percent to a record 175.6 billion dollars, while imports dipped 0.4 percent to 219.2 billion dollars, with imports from Japan plunging 25.5 percent.

The deficit in April was down from the revised figure of 46.8 billion dollars in March, the department said.

In the first four months this year, the deficit is running at an annual rate of 553.4 billion dollars, up 10.6 percent from last year's deficit of 500 billion dollars.

The April increase in exports of goods mainly reflected increases in industrial supplies and materials, capital goods, and consumer goods. Decreases occurred in automotive vehicles, parts and engines. Export of foods, feeds and beverages also dropped in April.

The decrease in imports of goods reflected decreases in automotive vehicles, parts and engines, capital goods, industrial supplies and materials. Consumer goods, foods, feeds and beverages imports increased in the month.

Trade is expected to be essentially neutral in terms of its impact on U.S. economic growth this year. The trade deficit has been a drag on U.S. economic growth for many years.

President Barack Obama vowed in early 2010 to double the country's exports in five years and create about 2 million jobs within the United States.

The Obama administration is trying hard to fulfill the president's goal, which means an average 15 percent increase in exports annually.