The U.S. trade deficit edged up in April but likely will remain well below last year's pace as the global recession dampens demand for both foreign goods and U.S. exports like automobiles and heavy machinery.
Analysts said rising prices of imported oil likely won't widen the trade gap significantly later this year. That's because higher oil prices are expected to coincide with an improved global economy. So exports of U.S. goods also would rise.
The Commerce Department said Wednesday that the deficit rose for a second straight month in April, climbing 2.2 percent to $29.2 billion. That was slightly higher than economists' expectations.
The overall deficit is running at an annual rate of $361.1 billion, about half the $695.9 billion total for all of 2008. The drop in imports has been greater than the fall in exports, which also are down sharply as the global recession cuts demand for U.S. products in key markets. Since exports and imports both hit record-highs last July, exports have fallen 26.3 percent and imports are down 34.5 percent.
Because of the global downturn, economists say they don't think exports, which had been one of the few bright stops for the U.S. economy, will be able to lead the recovery.
"When growth slows, that means demand for everything comes down, and that is true not just in the U.S. but everywhere else," said Joel Naroff, chief economist at Naroff Economic Advisors.
Many economists doubt the trade gap will expand much further. Paul Dales, U.S. economist at Capital Economics in Toronto, said even if oil prices keep rising and push the trade deficit toward $40 billion, that would "reverse only a third of the narrowing ... over the past 12 months."