Trade deficit increases in April

The Department of Commerce announced that the goods and services deficit rose to $60.9 billion up from the revised figure of $56.5 billion in March. The increase in exports of $5.0 billion was offset by the increase in imports of $9.4 billion. The goods deficit increased $4.5 billion from March to $72.9 billion and the services surplus increased by $0.1 billion to $12 billion.

The deficits with our biggest trade partners all increased last month. China was up to a $20.2 billion deficit (from $16.1 billion in March), OPEC was $15.6 ($14.1), the European Union $8.5 ($7.5), Japan $7.6 ($7.5), Canada $7.6 ($6.4), and Mexico $6.8 ($6.0).

Adjusted for inflation, the trade deficit for the last twelve months ending in April declined slightly from the deficit for the one year period ending in March. The annual change in Personal Income adjusted for inflation in April rebounded a bit from its freefall over the last few months. However, the increases in personal income are negligible compared to our trade deficit (unlike in the past when it more than offset our trade deficit). With the increases in commodity prices and the weaker dollar we are continuing to borrow from the future to fund our current lifestyle.

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