Although the US trade deficit widened in April, the number ended up being better than expected. Furthermore, the March trade deficit was revised lower than originally reported.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-L4AUPjqxLqKEDsLABKSU8JNgB9y6HcxW72BHCU4h6f43-7umxawEmT3cFD_zAgoY9uUVLzXxtGfXBcPuW7D9ut-xYAilOhknzkXSsZBSavBljrOuZbK32t9-7APsGfR6f4rNvb1f0cnI/s1600/US+trade+deficit.PNG) |
Source: Econoday |
While this result is certainly a positive for the US economy, longer-term trade dynamics paint a different picture. The good news is that the US net imports of oil are declining, as the nation's production ramps up (
see discussion). The bad news is that the longer term trend in non-petroleum merchandise trade shows an increasingly larger deficit. Americans have not lost their taste for foreign made cars, phones, etc.
USA Today: - Imports grew ... 2.4% to $227.7 billion. Sales of foreign cars increased to $25.5 billion. Americans also bought more consumer goods, led by big gain in foreign-made cell phones.
It means that in the future, should fuel production in the US stumble for some reason, trade deficit will spike.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi-6k-8fCH2VkDrQobDdGaKzre_VOXvd7ZOYjWEc9TV65K14Q5Bq_Ql4n19lxqYnL0aG1TBmmBYLjP-9Ly6pWw4QZz2OiNEkZ9fdpLYGHd_zkRbPF0hyphenhyphenlAXmSE0ngH-bSs8W7rl3SFnvQa7/s1600/US+real+merchandise+trade+balance.PNG) |
Source: JPMorgan |
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