U.S. Trade Deficit Narrows Slightly

Americans’ demand for foreign-made TVs, toys and clothes waned in April, helping to narrow the U.S. trade deficit. Exports fell for the second month in a row.

The country’s trade imbalance shrank to $32.2 billion, a 2.7% decrease from March’s $33.1-billion deficit, the Commerce Department reported Thursday.

Imports, hurt by sagging demand because of the weak U.S. economy, fell more than exports did in April, narrowing the trade gap. The two-month drop in exports reflected the impact of sluggish demand overseas.

“This is really a sign of weakness all around,” said Paul Kasriel, chief economist at the Northern Trust Co.

In April, imports of goods and services declined by 2.2% to $119.1 billion, while exports dipped by 2% to $86.9 billion.

“We have a lackluster American consumer and slowing growth abroad,” said economist Clifford Waldman of Waldman Associates.

Through the first four months of this year, the deficit swelled to $127.2 billion, compared with $116.8 billion during the same period last year.

For all of last year, the deficit mushroomed to a record $375.7 billion, according to annual revisions also released Thursday. The government had previously reported a trade shortfall of $368.9 billion for all of 2000.

The monthly trade report showed that the United States’ politically sensitive deficit with China jumped by 9.7% in April to $6.3 billion. The U.S.’s deficit with Japan widened by 3.1% to $6.4 billion, as U.S. exports to the country hit their lowest point in a year.

The U.S. trade deficit with Mexico narrowed to $2.2 billion, while the deficit with Canada widened to $4.6 billion.

Exports of U.S.-made capital goods, such as airplanes and semiconductors, fell to $27.9 billion in April, the lowest level since March 2000, adding to the woes of domestic manufacturers, who have been hardest hit by the domestic economic slowdown.

In a bright spot for U.S. companies, sales of U.S.-made consumer goods, such as artwork, books and furniture, to other countries rose to a record $7.9 billion in April.

In a separate report, the Labor Department said the number of Americans filing new claims for state unemployment insurance fell sharply by 34,000 to 400,000 last week. Even with the unexpected drop, claims are still at a level suggesting that the weak U.S. economy has sapped demand for workers.