Trade Deficit Widens Unexpectedly in April

THE United States merchandise trade deficit widened in April to $10.49 billion, the worst performance in more than four years as American consumers' demand for foreign oil and cars increased.

The Commerce Department said the April deficit was up 0.3 percent, following an even larger 32-percent surge in March that pushed it to $10.45 billion. The deficit with Japan jumped 4.4 percent to $5.5 billion.

The trade performance caught analysts by surprise. They had forecast that the trade gap would narrow significantly to around $8.5 billion as imports slowed from their record pace in March. But imports posted only a tiny decline in April, falling 1 percent to $48.87 billion. At the same time, US exports fell 1.3 percent to $38.38 billion.

The April deficit was the country's worst monthly trade showing since December 1988. So far this year, the trade deficit is running at an annual rate of $109.54 billion, far above last year's $84.5 billion. Economists forecast that the deficit will remain at that level for the entire year.

Their gloomy outlook is based on a belief that growth in US exports will slacken this year because of recessions in many of its major overseas markets.