WASHINGTON — 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 percent 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.
On Wall Street, growing anticipation that the Federal Reserve will cut interest rates for a sixth time this year to revive the U.S. economy helped lift stocks higher.
The Dow Jones industrial average closed up 68.10 at 10,715.43.
In April, imports of goods and services declined by 2.2 percent to $119.1 billion, while exports dipped by 2 percent 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.
America’s continuing trade deficits represent a political challenge for President Bush as he tries to overcome congressional resistance to give him unfettered authority to negotiate new regional and international trade pacts.
Bush administration officials pressed their case for that on Capitol Hill on Thursday, a day after Bush criticized opponents who want to add labor and environmental conditions to his “fast track” trade authority.
Fast-track authority would allow Bush to strike a new free-trade agreement with all the democratic nations in the Western Hemisphere, as well as open a new round of World Trade Organization talks on lowering trade barriers.
The Bush administration argues that American companies have no choice but to compete in the global economy, but critics contend that lower trade barriers subject American workers to unfair competition from low-wage countries with lax environmental standards.
The monthly trade report also showed that the United States’ politically sensitive deficit with China jumped by 9.7 percent in April to $6.3 billion. The U.S.’ deficit with Japan widened by 3.1 percent to $6.4 billion, as U.S. exports to the country hit their lowest point in a year.
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.
At the same time, imports of capital goods declined to $26 billion, the lowest level since November 1999, as U.S. businesses, struggling with the slowdown, cut back on their purchases, economists said.
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.
A broader measure of cross-border activity, the “current account,” narrowed in the first three months of this year to $109.6 billion from an imbalance of $116.3 billion in the fourth quarter.
The current account includes not only goods and services but also investment flows between countries and unilateral transfers, including U.S. foreign aid payments.
In a third 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.
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