The gap in goods and services trade narrowed US$20.6 billion, or 19.1 per cent, to $87.1 billion, US Commerce Department data showed. The median estimate in a Bloomberg survey of economists called for an $89.5 billion deficit. The figures aren't adjusted for inflation.

Imports dropped in April as factory activity in China fell to the lowest level since February 2020 amid strict lockdowns to curb the spread of Covid. While manufacturing in the country has improved somewhat since, the measures are still straining already-tenuous global supply chains, especially when coupled with Russia's war in Ukraine.

The deficit with China decreased in April by $8.5 billion, the most in seven years. Imports dropped $10.1 billion, also the most since 2015.

Decades high inflation is expected to weigh on trade this year, with the World Trade Organisation cutting its forecast for growth in global merchandise volumes. So far though, in the US, that hasn't materialised yet, judging by the near record amounts of goods that arrived at the ports of Los Angeles and Long Beach in April.

In the first quarter, the widening of the trade deficit largely explained the economy's worst performance since the pandemic recovery began, with gross domestic product shrinking at a 1.5 per cent annual pace. That's because the value of products American businesses and consumers bought from overseas outpaced purchases of US goods and services by other economies.

The value of imports of goods and services decreased 3.4 per cent in April to $339.7 billion, the first drop since July in a broad-based decline. Exports increased 3.5 per cent to a record $252.6 billion.