The U.S. merchandise trade deficit unexpectedly narrowed in April to a six-month low, while inventories at wholesalers remained unchanged, according to preliminary figures released Wednesday by the Commerce Department.

Key Takeaways

Imports and exports both declined by 0.5 percent at the start of the second quarter amid a slowdown in domestic sales and foreign shipments of automobiles. U.S. purchases of foreign-made goods are likely to pick back up in coming months as consumer spending and business investment benefit from tax cuts and increased government spending.

At the same time, investors and economists are studying the data for any impact from U.S. tariffs and trade tensions, which have cast a shadow on the outlook for global growth. The Trump administration has used bilateral trade deficits as its rationale for renegotiating trade agreements and threatening to impose steep tariffs on Chinese imports.

Economists use the monthly advance report on trade and inventories—the two most volatile parts of the calculation for gross domestic product—to help forecast changes in gross domestic product. The Commerce Department on Wednesday also published revised data for first-quarter GDP, which showed the economy grew 2.2 percent at an annualized rate. That was slightly slower than previously estimated.

Other Details

• Outbound shipments of consumer goods rose 0.5 percent, while those for capital goods dropped 3 percent; automobile exports slipped 3.3 percent
• The value of imports of industrial supplies such as oil increased 2.3 percent, while imports of motor vehicles dropped 3 percent
• Inventories at automobile and parts dealers rose 0.6 percent at wholesalers
• Wholesale inventories of durable goods increased 0.2 percent; stocks of non-durable goods declined 0.2 percent
• Exports and imports of goods account for about three-fourths of America’s total trade; the U.S. typically runs a deficit in merchandise trade and a surplus in services