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Developing story. Check back for updates.
The numbers: The cost of imported goods fell 0.4% to mark the second decline in a row, contributing to a slowdown in U.S. inflation more broadly.
Economists polled by the Wall Street Journal had estimated a 0.8% drop.
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A deepening confrontation between the U.S. and China is eroding trade ties between the world’s two largest economies, with goods from China accounting for the smallest percentage of U.S. imports in 20 years.
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The numbers: The trade deficit in goods shot up 17% in April to a six-month high of $96.8 billion, reflecting a rebound in imports and a broad decline in American exports.
The trade gap in goods rose from $82.7 billion in March, the Census Bureau said.
Larger deficits subtract from gross domestic product, the official scorecard for the economy.
An advanced estimate of wholesale inventories, meanwhile, showed a 0.2% decline in April. Retail inventories rose 0.2% in the month, according to an early estimate.
Higher inventories add to GDP, but the mixed results suggest little impact.
Key details: Exports dropped 5.5% to $163.3 billion. U.S. companies shipped fewer cars, food, consumer goods, oil and other industrial supplies.
Imports of goods rose 1.8% to $260 billion in April, mostly because of higher oil prices and strong demand among consumers for new cars and trucks.
Big picture: The rebound in imports suggests more capacity for consumers to spend. Car sales this year have been particularly strong as more models become available and dealers offer more discounts.
Auto sales fell last year to the lowest level in 11 years owing to a shortage of vehicles and record prices.
The slowdown in inventory growth, however, indicates businesses are unsure about future demand. They are hedging their bets and don’t want to get caught with excess inventory like they did last year.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
rose in Friday trades.
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The trade deficit widened 2.7% in February to a four-month high of $70.5 billion and pointed to more stress on the U.S. economy.
The trade gap rose from $68.7 billion in January and was slightly above Wall Street forecasts.
Both imports and exports fell in February, reflecting weaker growth in the U.S. and abroad.
Key details: Imports fell 1.5% to $321.7 billion in February to extend a recent string of declines, the government’s trade report showed.
Part of the drop reflects lower oil prices, but Americans have also trimmed spending in response to rising interest rates and a slower economy
In February, imports of cell phones, consumer goods, clothing and drugs retreated.
A further decline in imports would be a potential warning sign of worse to come. They have declined 8% since peaking in March 2021.
Exports slid a sharper 2.7% to $251.2 billion and also continued a recent downtrend. Just seven months ago they touched a record high.
A weaker global economy could further sap demand for American goods and services.
In February, exports of industrial supplies, autos and parts, consumer goods and passenger planes all declined.
Big picture: The U.S. is on track to break a string of three straight years of rising and record deficits, but not for reasons conducive to a healthy economy.
Looking ahead: “The sharp declines in both exports and imports in February add to the signs that economic growth is faltering,” said deputy chief U.S. economist Andrew Hunter of Capital Economics.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open slightly lower in Wednesday trades.
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