The U.S. trade deficit rose to the highest level in 16 months as exports fell for the second time in three months, according to the U.S. Commerce Department. The trade deficit widened to $40.3 billion in April, up by 0.6 percent from March. U.S. exports dropped 0.6 percent while imports declined by 0.4 percent.
The major concern is that Europe's debt crisis will slow growth in that part of the world and dampen demand in a market that accounts for about 15% of U.S. exports. Imports slipped by $189.1 billion with demand for oil basically unchanged from March while total consumer goods imports dipped by $741 million.
Many economists are worried that Europe could fall into a double-dip recession. That will dampen demand for U.S. exports in a region