U.S. Trade Balance Deteriorates

The U.S. trade balance deteriorated to -US$29.2 billion in April following March's -US$28.5 billion (revised from -US$27.6 billion). Excluding petroleum, the trade balance deteriorated to -US$24.2 billion in real terms from -US$22.9 billion in March.

Nominal exports fell 2.3% on the month, pushing the year-over-year decline to 21.8%. Imports were down 1.4% in April, causing the year-over-year rate to decline to 30.7%.

Today's report is consistent with our view that net trade will make a negative contribution to economic growth in the second quarter of this year. Thereafter, the lagged impact of U.S. dollar weakness should help net exports become a positive contributor to U.S. growth in the second half of the year. Combined with the monetary and fiscal stimulus in the pipeline, we expect U.S. quarterly economic growth to return to positive territory in the second half of this year.

RBC Financial Group
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The statements and statistics contained herein have been prepared by the Economics Department of RBC Financial Group based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.