Trade deficit jumps to $40.3 billion in April

Analysts said the figures reflect signs of stability for the U.S. and global economy because consumers and businesses are picking up their spending amid tax hikes and the uncertainty pooling around fiscal policy in Washington. 

The export gain was boosted by a $586 million gain in sales of autos and auto parts, pushing up sales to a record-high $12.8 billion. 

Exports of jewelry rose by $783 million while diamond exports increased $674 million. 

Sales of foreign cars increased to $25.5 billion overall on a monthly increase of $1.28 billion in April. 

American purchases of cellphones rose by $816 million, computer sales were up $429 million and imports of telecommunications gear grew by $330 million. 

The concern over a wider trade gap is that it will weigh on economic growth. The economy expanded at a 2.4 percent pace in the first three months of the year but that could slow to about 2 percent.

Europe's financial struggles are holding back U.S. export growth. The trade gap between the world's two largest trading partners widened to $12.4 billion from $9.9 billion, a 25.6 percent increase. U.S. exports dropped off by 7.9 percent. 

The United States and European Union are set to kick off high-stakes trade talks next month to forge an agreement over the next couple of years in an effort to create a $5 trillion trade zone. 

Meanwhile, the trade gap with China surged again, jumping 34.8 percent to $24.1 billion from $17.9 billion, the highest with any single country. 

The April deficit with South Korea also hit an all-time high, up to $2.4 billion, driven by record imports. 

A separate report released Monday showed that U.S. factory activity contracted in April to near a 4-year low. 

Manufacturers have said a mix of tax increases and spending cuts are making it difficult for businesses to invest in the slowly growing economy.