US trade deficit drops sharply to $40.9 billion in April as exports increase and imports fall

The U.S. trade deficit declined sharply in April as exports posted a modest gain and imports fell, raising hopes that trade will not be as big a drag on overall growth in the current quarter.

The Commerce Department says the April deficit dropped 19.2 percent to $40.9 billion after surging to $50.6 billion in March, the highest level since late 2008. The big surge in the deficit reduced overall economic growth by nearly 2 percentage points in the first quarter, helping send the gross domestic product down at an annual rate of 0.7 percent.

In March, exports edged up 1 percent to $189.9 billion, led by a big rise in commercial airplane sales. Imports fell 3.3 percent to $230.8 billion. The deficit is the difference between imports and exports.