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The numbers: The U.S. trade deficit widened to $49.4 billion in April from a revised $42.3 billion in the prior month, the Commerce Department said Thursday. Economists polled by MarketWatch had forecast a $49.5 billion shortfall. The wider trade gap masks a significant decline in trade flows from the COVID-19 pandemic.
What happened: Exports fell 20.5% to $151.3 in April. The decline was led by civilian aircraft, crude oil, and autos.
Imports dropped 13% to $200.7 billion. The decline was led by passenger cars, semiconductors and consumer goods including pharmaceutical preparation and apparel.
Total exports are down 27.7% from April 2019, while imports are down 22.4%.
The U.S. services surplus narrowed $1.3 billion to $22.4 billion.
The trade gap with China widened $9 billion to $26 billion in April.
Big picture: The COVID-19 pandemic has depressed trade flows into and out of the U.S., economists said. The wider deficit should depress second-quarter gross domestic product even further. Economists surveyed by MarketWatch are expecting GDP to decline at a 27.2% annual rate in the April-June quarter.
What are they saying? “As global and US lockdowns ease, trade flows may begin to recover—leading indicators point that way. Yet downside risks remain, and we expect import and export volumes both to fall at record rates in 2020,” James Watson, senior economist at Oxford Economics.
Market reaction: Stocks were mixed on Thursday. The Dow Jones Industrial Average DJIA, -0.01% was up 14 points while the S&P 500 index SPX, -0.30% was down by 8 points in late morning trading.
