US trade deficit narrowed to $50.1 billion
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The U.S. trade deficit shrunk in April, but only because a big drop in imports offset the first decline in U.S. exports in five months.
The Commerce Department says the trade deficit narrowed 4.9 percent in April to $50.1 billion.
U.S. exports, which had hit a record the previous month, fell 0.8 percent to $182.9 billion. Sales of everything from commercial jetliners to industrial machinery declined.
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Imports, which also set a record in March, dropped an even faster 1.7 percent to $233 billion.
The trade gap remains wide and could therefore weigh on growth in the April-June quarter. A wider trade gap slows growth because it means the United States is spending more on foreign-made products than it is taking in from sales of U.S.-made goods.
And the slip in exports is troublesome because it shows the weaker global economy is dampening demand for American-made goods. Export sales declined to Europe, China and Brazil.
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Europe's debt crisis has worsened in recent months and many economists say the region is already in recession. Europe accounts for almost one-fifth of U.S. exports.
In addition Europe's troubles, growth in emerging market countries, such as China, has been slowing this year.
In March, the deficit increased sharply to $52.6 billion, slightly more than the $51.8 billion initially reported last month. It was the biggest increase in more than a year and dragged on economic growth in the January-March quarter.
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Most economists say the U.S. economy is growing at an annual rate of 2 percent to 2.5 percent in the current April-June quarter. That's slightly better than the 1.9 percent growth in the first three months of the year, but still only modest.