Following April's surprising drop in crude imports which led to a multi-year low in the March trade balance (revised to -$37.1 billion), the just released April data showed an 8.5% jump in the deficit to $40.3 billion, if modestly better than the expected $41.1 billion. This was driven by a $2.2 billion increase in exports to $185.2 billion offset by a more than double sequential jump in imports by $5.4 billion, to $222.3 billion. More than all of the change was driven by a $3.2 billion increase in the goods deficit, offset by a $0.1 billion surplus in services.The Census Bureau also revised the entire historical data series, the result of which was a drop in the March deficit from $38.8 billion to $37.1 billion. In April 233,215K barrels of oil were imported, well above the 215,734K in March, and the highest since January. Furthermore, since the Q1 cumulative trade deficit has been revised from $126.9 billion to $123.7 billion, expect higher Q1 GDP revisions, offset by even more tapering of Q2 GDP tracking forecasts. And since the data is hardly as horrible as yesterday's ISM, we don't think it will be enough on its own to guarantee the 21 out of 21 Tuesday track record, so we eagerly look forward to today's POMO as the catalyst that seals the deal.
[21]
[22]
Breaking down the export goods balance, the deficit reflected increases in consumer goods ($2.0 billion); capital goods ($0.9 billion); and automotive vehicles, parts, and engines ($0.6 billion). Decreases occurred in industrial supplies and materials ($0.9 billion); other goods ($0.5 billion); and foods, feeds, and beverages ($0.3 billion). On the import side, The March to April increase in imports of goods reflected increases in consumer goods ($3.0 billion); automotive vehicles, parts, and engines ($1.3 billion); capital goods ($1.0 billion); and other goods ($0.2 billion). Decreases occurred in industrial supplies and materials ($0.3 billion) and foods, feeds, and beverages ($0.1 billion).
Exports of services increased $0.4 billion from March to April. The increase was more than accounted for by increases in other private services ($0.2 billion), which includes items such as business, professional, and technical services, insurance services, and financial services, in travel ($0.1 billion), and in other transportation ($0.1 billion), which includes freight and port services. A decrease in passenger fares ($0.1 billion) partly offset these increases.
Broken down by country we find the biggest trade surplus with Hong Kong $2.4 ($3.2 for March), Australia $1.1 ($1.5), Singapore $0.8 ($1.4), and Brazil $1.2 ($1.7). Deficits were recorded with China $24.1 ($17.9), the European Union $12.4 ($9.9), Japan $6.9 ($6.6), OPEC $6.6 ($4.5), Germany $6.1 ($5.1), Mexico $4.4 ($5.3), Saudi Arabia $2.6 ($2.1), Canada $2.4 ($2.3), India $2.4 ($1.8), Ireland $2.4 ($2.1), Korea $2.4 ($1.3), and Venezuela $1.5 ($1.3).