The trade deficit in U.S. widened in April after hitting a three-year low in the previous month. Data released from the Commerce Department on Tuesday showed that the trade deficit in the U.S. expanded in April as consumer imports surged.
The gap grew by 8.5 percent to $40.3 billion from a $37.1 billion in March. Economists polled by Reuters had expected the trade deficit to rise to $41.0 billion in April.
The data revealed a rebound in imports of consumer goods and business equipment. Imports of consumer goods soared $3 billion in April, as Americans purchased more foreign-made cellphones and automobiles, and U.S. businesses increased their imports of computers and telecommunications equipment.
When adjusted for inflation, the trade gap increased to $47.6 billion from $44.6 billion in March. Economists warned the widening in the so-called real trade deficit, which economists use to measure the impact of trade on gross domestic product, indicated that trade continued to weigh on growth early in the second quarter.
All eyes are on Wednesday’s ADP employment report as the numbers capture only private-sector hiring, but the release often shifts expectations for the government’s highly anticipated jobs report that is released Friday. Economists expect ADP to report a May gain of 171,000 jobs.
Analysts are focused on Friday's jobs report as the median forecast of economists surveyed by Dow Jones Newswires calls for nonfarm payrolls to be up 165,000 in May, unchanged from the 165,000 gain reported in April. The unemployment rate is expected to remain at 7.5%.