WASHINGTON (Reuters) - The U.S. trade gap widened to $29.2 billion in April as exports weakened again in a reflection of waning global demand, a U.S. government report on Wednesday showed.
The Commerce Department said total exports fell 2.3 percent to $121.1 billion, the lowest level for foreign sales since mid-2006. Exports have dropped in eight of the past nine months as the world economy struggled through a financial crisis that has sapped consumers’ ability and willingness to spend.
The April deficit was in line with Wall Street forecasts.
Imports declined in April for a ninth straight month but by a smaller amount than exports, down 1.4 percent to $150.3 billion. That was the lowest value for imports since September 2004, more evidence that the recession-struck U.S. economy was not generating as much demand as it once did.
Analysts said U.S. reliance on China as its chief supplier was growing and hopes that stronger trade could replace consumer demand as a driver for U.S. growth were fading because the whole world was in a slowdown.
“We are not going to get a big boost from trade,” said David Wyss, chief economist fro Standard and Poor’s Ratings Services in New York. “We are losing the one good tailwind that we have had.”
Wyss said U.S. gross domestic product, the broadest measure of overall economic growth, was likely to contract at a 2.8 percent annual rate in the second quarter after shrinking 5.7 percent in the first three months of this year.
The dollar slipped against a range of currencies, while U.S. Treasury yields rose on Wednesday after Russia’s central bank said it will cut the share of its currency reserves invested in U.S. Treasuries and buy bonds issued by the International Monetary Fund.
Imports of industrial supplies and materials, which include minerals, chemicals and lumber used in U.S. manufacturing, fell in April as did imports of new cars and parts. But imports of consumer goods like televisions, cosmetics and pharmaceuticals rose modestly from March levels.
The monthly deficit on goods trade with China climbed to $16.8 billion from $15.6 billion in March and was the largest with any single country. During a visit to Beijing last week, Treasury Secretary Timothy Geithner said U.S. consumers were no longer in a position to keep powering global growth with the United States in recession since late 2007.
U.S. exports to nearly all of its major trading partners fell. Exports to Japan plummeted to a 15 year low of $3.9 billion, while exports to the European Union dropped 9.9 percent to $17.8 billion.
Despite soft demand, oil prices rose to their highest level this year. Imported oil cost $46.60 a barrel in April, up from $41.36 in March.
Reporting by Glenn Somerville, editing by Neil Stempleman