Published: Fri, June 08, 2018
Finance | By Loren Pratt

US trade deficit falls for second straight month in April

US trade deficit falls for second straight month in April

Economists had expected a deficit of $3.4 billion, according to Thomson Reuters Eikon.

Canada's merchandise trade deficit with the rest of the world narrowed in April to 1.90 billion Canadian dollars ($1.46 billion), Statistics Canada said Wednesday. As a result, the trade surplus with the United States grew to C$3.63 billion in April from C$2.03 billion in March.

The April decrease in the goods and services deficit reflected a decrease in the goods deficit of $1.0 billion to $68.3 billion and a decrease in the services surplus of less than $0.1 billion to $22.1 billion.

OTTAWA-Canada's trade deficit narrowed in April as exports reached a record high on increased shipments of some mineral products, consumer goods and energy products. The drop in imports was paced by 5.8% tumble in motor vehicles and parts, as passenger auto and light truck imports fell 8.9% as they returned to more typical levels after stronger than typical import levels for light trucks in March, said Statistics Canada. Imports fell 2.5 percent, paring back strong gains in March.

The data underscored the continued importance of the giant USA market, which took 74.3 percent of all Canadian goods exports in April.

The monthly gap with Mexico narrowed 29.8 percent to $5.7 billion. Canada has said it would slap tariffs on imports from the United States, including whiskey, orange juice, steel, aluminum and other products.

Natural gas prices grinded higher ahead of Thursday's inventory report from the Department of Energy. Meanwhile, imports dropped 2.5 percent in the month, held back by motor vehicles and parts as well as consumer goods.

Imports of goods and services slipped 0.2 percent to $257.4 billion in April. Talks to head off a trade war between the world's two largest economies have so far failed to produce a resolution, even though China has offered to step up purchases of US farm and energy products. In particular, shipments of industrial materials and soybeans rose significantly. The shortfall was considerably less than the $3.40-billion deficit forecast by analysts. Crude oil imports rose $1.0 billion in April, with prices averaging $54.50 per barrel.

While the drop in consumer goods imports helped to curb the import bill, it could be signaling a slowdown in domestic demand. That followed a 0.3 percent growth pace in the fourth quarter. Slower productivity is being accompanied by rising labor costs, which could hurt company profits in the long run.

In volume terms, imports were down 2.4 percent.

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