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US trade deficit narrows in April amid falling global demand

The US trade deficit shrank 4.9 percent in April to $50.1 billion as exports and imports fell.

Us container shipEnlarge
US exports fell in April for the first time in five months. (PAUL J. RICHARDS/AFP/Getty Images)

The US trade deficit narrowed in April from the previous month as imports and exports fell from record highs set in March, reflecting weakening demand around the world.

According to the Associated Press, the trade deficit shrank 4.9 percent in April to $50.1 billion, compared with an upwardly revised $52.6 billion in March, as imports dropped 1.7 percent to $233 billion.

Exports fell 0.8 percent to $182.9 billion, marking the first decline in five months and indicating the deepening euro zone crisis was taking a toll on the world’s largest economy, Bloomberg reported, citing figures from the Commerce Department.

Reuters said US exports to the European Union, which is teetering on the edge of recession, fell 11.1 percent in April to $22.3 billion.

“With the euro zone crisis set to rumble on for some time yet, US exports to the euro zone are only likely to fall further," Paul Dales, senior US economist at Capital Economics in Toronto, was quoted by Reuters saying.

"The upshot is that net trade is unlikely to add much to GDP growth this year and may even subtract from it.”

According to Agence France-Presse, the US trade deficit with the euro zone shrank by a billion dollars to $7.2 billion.

Its trade gap with China widened to $24.6 billion in April from $21.7 billion a month earlier. The Financial Times noted that the politically sensitive trade shortfall with China represented almost half of the total US trade deficit.

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http://www.globalpost.com/dispatch/news/regions/americas/united-states/120608/us-trade-deficit-narrows-april-amid-falling-glob