The United States, with its aggressive pandemic aid measures and rapid vaccine rollout, is propelling the world economy, acting as a source of demand in all corners of the globe.
The government has been spending billions, creating booming demand in the United States. As new trade data shows, though, a meaningful share of this money is leaking overseas and going toward imported goods, in what economists call “fiscal leakage.”
Ultimately, the outlook for the U.S. economy will depend on the ability of other countries to take over as drivers of global demand in the months ahead — a prospect that remains uncertain.
America is buying much more stuff from overseas, as its stimulus-fueled economy revs forward, while the rest of the world has not yet caught up and started buying more U.S. exports. That is why the trade deficit was $68.9 billion in April, which was down from $75 billion in March but far above levels of around $45 billion per month immediately before the pandemic. People are spending their stimulus money on imported furniture, appliances and other goods.