The US trade deficit narrowed in April as exports climbed to a record, offering a cleaner read on trade than a deficit driven lower by collapsing imports.

The goods and services deficit fell 1.2% to $55.9 billion, according to the Bureau of Economic Analysis and Census Bureau. Exports rose 2.6% to a record $327.1 billion, while imports increased 2% to $383 billion.

The advance goods data showed an even sharper move, with the goods only deficit narrowing to $82.4 billion from $85.3 billion in March. The final goods deficit came in at $83.7 billion after revisions.

Goods exports rose to $219.7 billion in April, also a record. The gain was supported by stronger shipments of capital goods, petroleum, and other industrial products, suggesting the improvement was driven by foreign demand rather than a sudden pullback in US consumption.

That distinction matters. A smaller deficit caused by weaker imports can signal slowing domestic demand. A smaller deficit caused by stronger exports points to more resilient external demand for US goods.

Imports still rose in April, though at a slower pace than exports. Capital goods imports increased as companies continued spending on equipment, including AI related hardware such as computers and semiconductors.

That AI buildout is the caveat for investors. If US companies keep importing specialized chips, servers, and data center equipment at scale, the trade deficit could widen again even if exports remain strong.

The year to date picture still shows a major improvement. The goods and services deficit through April was down 49.1% from the same period in 2025, with exports rising and imports falling on a cumulative basis.