By Lucia Mutikani
WASHINGTON, June 9 (Reuters) – The U.S. trade deficit narrowed in April as exports of petroleum products and capital goods jumped to record highs, a trend that if sustained, will put trade on course to contribute to economic growth in the second quarter.
The report from the Commerce Department on Tuesday suggested no major impact on trade flows from the U.S.-backed war with Iran, which has disrupted shipping in the Strait of Hormuz. Tariffs also appeared to be doing little to curb imports. Businesses ramping up spending on artificial intelligence helped to lift capital goods imports to a record high in April.
“Soaring oil exports are helping to narrow the U.S. trade gap, with tariffs playing a more minor role in slowing imports,” said Sal Guatieri, a senior economist at BMO Capital Markets. “Though early in the quarter, this suggests some upside risk to second-quarter GDP growth estimates.”
The trade gap contracted 1.2% to $55.9 billion, the Commerce Department’s Bureau of Economic Analysis and Census Bureau said. Data for March were revised lower to show the deficit at $56.6 billion instead of the previously reported $60.3 billion.
Economists polled by Reuters forecast the trade deficit would shrink to $56.1 billion in April. Exports increased 2.6% to $327.1 billion, a record high. Goods exports surged 4.1% to a record $221.3 billion. Petroleum exports increased to a record high of $36.7 billion from $27.6 billion in March, driven by higher volumes and oil prices tied to the Middle East conflict.
The U.S. is a net oil exporter. Crude prices have shot above $100 per barrel since the war started in late February. The increase in petroleum products, including crude oil, pushed exports of industrial supplies and materials to a record high of $89.0 billion. The nation’s petroleum trade surplus swelled to a record high of $17.7 billion from $9.4 billion in March.
“The good news is that the trade picture is moving into better balance at the start of the second quarter … but the bad news is the export growth looks uncertain, as much of it appears to be the result of higher energy prices from the Iran conflict,” said Christopher Rupkey, chief economist at FWDBONDS.
Exports of capital goods increased $4.0 billion to a record high of $70.3 billion amid strong gains in computers and civilian aircraft. Consumer goods exports increased $1.7 billion.
The increase in overall exports outpaced imports, which rose 2.0% to $383.0 billion in April. Goods imports advanced 2.1% to $304.9 billion. They were lifted by a $7.0 billion increase in capital goods, mostly computers, semiconductors and telecommunications equipment, reflecting the AI spending spree.
