While a jump in the value of imports contributed to a notably wider U.S. trade deficit in the month of April, the deficit still came in narrower than economists had expected.
A report released by the Commerce Department on Tuesday showed that the trade deficit widened to $40.3 billion in April from a revised $37.1 billion in March.
Economists had been expecting the trade deficit to widen to $41.2 billion from the $38.8 billion originally reported for the previous month.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said the rebound by the trade deficit was "largely due to an unwinding of the distortion caused by the Chinese Lunar New Year Holiday."
"That distortion was responsible for most of the earlier decline in the deficit to $37.1 billion in March, from $43.8 billion in February," he added.
The Commerce Department said the U.S. trade deficit with China widened to $24.1 billion in April from $17.9 billion in March. The increase reversed the decline seen in the previous month.
The wider deficit compared to the previous month also reflected a notable increase in the value of imports, which rose 2.4 percent to $227.7 billion in April from $222.3 billion from in March.
The value of exports rose by a more modest 1.2 percent, climbing to $187.4 billion in April from $185.2 billion in the previous month.
"It is encouraging to see both exports and imports rebounding, although the latest survey evidence suggests that may be only a temporary recovery," Ashworth said.
He added, "More generally, net external trade is on course to make a largely neutral contribution to second quarter GDP growth, which we still forecast will be around 2.0% annualized."
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.