US Trade Gap Widens to $68.9 Billion, Largest In Nearly A Year
(Bloomberg) -- The US trade deficit widened in February for a third month as the value of imports exceeded exports.
The deficit in goods and services trade expanded 1.9% from the prior month to $68.9 billion, the largest shortfall in nearly a year, Commerce Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for a $67.6 billion gap.
The value of imports rose to almost $332 billion, on gains in mobile phones, foods and motor vehicles. Exports increased to $263 billion, reflecting shipments of civilian aircraft and crude oil. The figures aren't adjusted for inflation.
A wider trade deficit so far this year is expected to subtract from gross domestic product for the first time since early 2022. Prior to the latest results, the Federal Reserve Bank of Atlanta's GDPNow forecast showed trade subtracting nearly half a percentage point from first-quarter growth.
What Bloomberg Economics Says...
“The trade deficit widened again in February as US economic resilience continues to support domestic consumption. With two months of US census data in hand, exports are expected to provide a limited boost to 1Q GDP growth, a reversal from the prior quarter.”
— Estelle Ou. To read the full note, click here
While the US trade balance has improved since 2022, the appetite for imported merchandise may stay elevated given resilient consumer spending and inventories that are more in line with sales. Moreover, recession risks in overseas markets are restraining demand for US exports.
On an inflation-adjusted basis, the merchandise trade deficit widened to $87 billion in February, the largest since July.
Digging Deeper
- Travel exports — or spending by visitors to the US — increased to the highest since June 2019
- Travel imports — a measure of Americans traveling abroad — climbed to a fresh record high
- The US merchandise-trade deficit with China narrowed to $21.9 billion, the smallest in three months, reflecting a decline in the value of imported goods
- The goods shortfall with Mexico widened to a record $15.3 billion as imports reached an all-time high
--With assistance from Chris Middleton.
(Adds Bloomberg Economics comment)
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