CEO Morning Brief

US Trade Deficit Widens to Largest in Six Months on More Imports

Publish date: Thu, 08 Jun 2023, 08:49 AM
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TheEdge CEO Morning Brief

(June 7): The US trade deficit widened in April to the largest in six months as imports picked up and exports declined.

The shortfall in goods and services trade grew by US$14 billion, or 23% from a month earlier, to US$74.6 billion, Commerce Department data showed Wednesday. The figures aren’t adjusted for inflation. The median estimate in a Bloomberg survey of economists called for a widening to US$75.8 billion.

The value of goods and services imports rose 1.5% to US$323.6 billion, while exports fell 3.6% to US$249 billion. Imports of autos and parts, industrial supplies, mobile phones and other household goods increased. Outbound shipments of oil and jewelry fell.

The wider deficit suggests trade will subtract from second-quarter gross domestic product. While that reflects greater dependence on foreign producers, the increase in imports also illustrates resilient demand for consumer goods.

Separate data have pointed to robust household spending at the start of the second quarter, underpinned by a solid job market.

Whether that momentum can be sustained, however, is unclear.

On an inflation-adjusted basis, the April merchandise trade deficit increased to US$95.8 billion, the largest gap since June 2022.

The latest release also incorporates revisions to historical data. Statistics on merchandise trade were revised back to 2018, while figures on services were adjusted back to 2017. The reference year for the inflation-adjusted series was also updated to 2017 from 2012.

Source: TheEdge - 8 Jun 2023

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