The Trade Deficit

. . . is narrowing, though the U.S.-China balance is still out of whack. This weak dollar thing is very helpful overall, though of course one feels sorry for the college kids who are doing their summer-in-Europe this year (mine was during the 1980s, so our dollars bought oodles of extras).

The U.S. trade deficit narrowed more than forecast in April as a weaker dollar pushed exports to a record and demand for imports waned.

The deficit fell 6.2 percent, the most in six months, to $58.5 billion, from a revised $62.4 billion in March, the Commerce Department said today in Washington. The gap declined even as the shortfall with China widened.

The dollar's drop and expanding economies in Europe and Asia are fueling demand for American-made goods and the deficit is retreating from a record $67.6 billion in August. The gain in exports may also help economic growth accelerate after the slowest quarter in more than four years.

``The trade imbalance seems to be permanently on the mend,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``Certainly, trade is going to contribute to growth in the second quarter.''

Rupkey predicted a deficit of $60.2 billion, the lowest among 74 economists surveyed by Bloomberg News before the report was published.

In April, exports rose 0.2 percent to a record $129.5 billion, as sales of foods, plastics and consumer goods such as jewelry improved. Imports slipped 1.9 percent.

``The rest of the world is growing,'' said Diane Swonk, chief economist at Mesirow Financial Inc. in Chicago. ``With the tailwind of a weak dollar, that's good news to keep our factories humming. This will probably easily throw GDP growth over the 3 percent range for the second quarter.''

Via Reynolds, who remarks, "good news, I think. Am I wrong?"

Well, it looks more good than bad to me, especially when coupled with this tantalizing little detail:

Oil imports fell to $24.9 billion, from $25 billion a month earlier, as a drop in volume offset higher prices.

Hackbarth? Verdon? What do you think?