On Wednesday, June 3, 2015, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis (BEA), through the Department of Commerce, reported the trade balance for the month of April. Results show that the trade deficit shrank more than expected. (Source: Bureau of Economic Analysis, June 3, 2015.) The gap reduced by 19.2% to $40.9 billion, down $9.7 billion from the prior month’s $50.6 billion—which was the widest in more than six years, as Commerce Department figures showed on Wednesday. April exports were at $189.9 billion, $1.9 billion more than March exports. April imports were at $230.8 billion, which is $7.8 billion less than March imports. Following the end of a labor dispute, imports declined to $230.8 billion, a 3.3% decrease from March after jumping 6.6% that same month. In April, total exports increased one percent to $189.9 billion, the highest this year, due to increased shipments of aircraft and telecommunications equipment, as the Department of Commerce’s data showed on Wednesday. Over the past year, U.S. manufacturers have been hurt by the stronger dollar. This makes American goods and services more expensive to foreigners and makes imports cheaper.
American Crude Oil Production Increasing; Implication on Trade
U.S. oil production is at its highest level in 80 years. Crude oil production will probably remain at the same level; which will cause a further decline in imports. In April, the U.S. petroleum gap fell to the lowest level in 13 years. (Source: U.S. Energy Information Administration, last accessed June 3, 2015.) The value of the crude oil imports was at $11.0 billion in April, slightly higher than March’s $10.5 billion. The trade deficit in petroleum shrank to $6.8 billion in April due to an increase in U.S. fuel exports.
Major Trade Agreement in the Making
The Obama administration is lobbying congress for the power to negotiate a major trade agreement called the Trans-Pacific Partnership (TPP), under expedited procedures. The 12-nation Trans-Pacific trade deal is targeted to provide opportunity to grow for American businesses and workers. It’s also expected to support American jobs and make American products available to rapidly growing countries. (Source: Office of the United States Trade Representatives, last accessed June 3, 2015.)