Trade Deficit Narrows Sharply on Record Exports

The U.S. trade deficit dropped a greater-than-expected 6.2% in April to $58.5 billion on record exports, the Commerce Department said Friday. Economists were calling for the deficit to narrow slightly to $63.5 billion, down from $63.9 billion in March. Exports were up 0.2% to a record $129.5 billion; imports came in at $188 billion. According to MarketWatch, the surprise drop may foretell a Q2 rise in GDP; on Wednesday the White House lowered its GDP growth forecast from 2.9% to 2.3%. The much-watched China trade gap widened to $19.4 billion in April, up from $17.1 billion in April 2006 and $17.2 billion last month. The total China deficit this year is $76.3 billion, up from $64.4 billion this time last year. In other regions, surpluses were seen in Hong Kong $1.0 billion (vs. $1.3 for March), Australia $0.7 ($1.0), Singapore $0.4 ($0.9), Argentina $0.1($0.1), and Egypt $0.1 ($0.2). Deficits were seen in Europe $10.0 billion ($8.9), OPEC $9.8 ($8.7), the EU $9.0 ($7.7), Japan $7.4 ($7.1), Canada $5.8 ($5.4), Mexico $5.2 ($6.7), Korea $1.0 ($1.2), Taiwan $0.7 ($1.0), and Brazil $0.3 ($0.4). Exports of food/feed were up 12.1%; semiconductor exports fell 5.0%. After dropping strongly in the early morning hours, Treasury and equity futures are currently (8:58 ET) trading in their upper-middle pre-market range.

Sources: BEA press release, MarketWatch, Bloomberg
Commentary: Dangerous Divergences in the Global Bond and Stock Markets • White House Lowers 2007 Growth Forecast, Raises Inflation Outlook • The U.S. Trade Deficit: Are We Trading Away Our Future?
Stocks/ETFs to watch: S&P 500 Index (SPY), Diamonds Trust Series 1 ETF (DIA), iShares Lehman Aggregate Bond (AGG)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.

Comments

[Richie:]

It's amazing that you and other pundits make issue of a positive change in our trade deficit (rarely) while the annual rate continues at record levels. It is now running at nearly 3/4 of a TRILLION dollars annually --- and continues to grow, even as our dollar has collapsed in recent years!!!

Is there any GOOD NEWS to report???

2007 Jun 09 09:53 AM