Trade Gap Narrows Slightly

Breaking News June 13, 2003 By Elizabeth Price <a href=www.smartmoney.com>Dow Jones Newswires

WASHINGTON -- The April U.S. trade deficit narrowed just slightly from a record high in March, as a jump in the volume of oil imports offset some of the effect of lower prices on the nation's energy bill.

The deficit in international trade in goods and services narrowed to $42.03 billion in April from a revised deficit of $42.87 billion in March, the Commerce Department said Friday. The March shortfall had been previously reported at $43.46 billion. However, Commerce issued substantial revisions to trade data from 1992 to 2003, stemming from its annual recalculation of seasonal adjustment factors.

Analysts had expected the trade gap to narrow in April. A Dow Jones-CNBC survey of economists had predicted the deficit would narrow to $41.8 billion for the month. But sluggish economic growth overseas depressed exports, leaving the deficit a bit higher than predicted.

April imports fell 2.1% to $123.03 billion, reflecting a $2.36 billion drop in imports of industrial supplies like energy, iron and other metals. Americans bought fewer foreign-made autos and parts, lowering imports by $400 million, and cut imports of consumer goods like toys, clothes and pharmaceuticals by $179 million. Imports of foods, feeds, and beverages rose $60 million to a record $4.69 billion.

The U.S. crude oil tab totaled $8.19 billion in April, down from $9.10 billion in March. This reflected imports of 314.66 million barrels for the month--the second-highest on record, Commerce said. The rise in volume in part offset a $4.25 drop in the average price of a barrel to $26.02.

Exports were off 2.2% to $81.00 billion. The largest decline, $616 million, came from capital goods like computers and industrial engines. Consumer goods exports fell $156 million, while U.S. sales of industrial supplies fell $153 million.

The report showed that deficits with major U.S. trading partners were mixed in April. The trade deficit with Western Europe decreased to $8.44 billion from $7.79 billion in March.

Deficits with NAFTA partners Mexico and Canada narrowed. The deficit with Mexico narrowed to $3.34 billion from $3.92 billion the previous month. The deficit with Canada dropped to $3.81 billion from $5.15 billion.

The deficit with China widened to $9.45 billion from $7.67 billion, and the deficit with Japan grew to $5.97 billion from $5.83 billion.

The April deficit with OPEC countries, like Saudi Arabia and Venezuela reached a record level of $5.03 billion.

-Elizabeth Price; Dow Jones Newswires; 202 862-9295; elizabeth.price@dowjones.com.

(END) Dow Jones Newswires

06-13-03 0847ET