With the value of imports increasing at a faster rate than the value of exports in the month of March, the Commerce Department released a report on Thursday showing that the U.S. trade deficit for the month widened by more than anticipated.
The report showed that the trade deficit widened to $51.8 billion in March from a revised $45.4 billion in February. Economists had expected the deficit to widen to $49.5 billion from the $46.0 billion originally reported for the previous month.
The increase in the size of the deficit nearly offset the steep drop seen in the previous month, although the deficit still remains narrower than the three-year high of $52.5 billion set in January.
"The large swings in the trade gap in recent months were probably influenced by the Chinese Lunar New Year," said Christoph Balz, an economist at Commerzbank. "Overall, net trade had a neutral effect on GDP growth in Q1."
A jump in the value of imports contributed to the wider deficit in March, with imports surging up 5.2 percent to $238.6 billion from $226.9 billion in the previous month. With the increase, the value of imports rose to a record high.
The increase in the value of imports reflected notable increases in imports of capital goods, consumer goods, and industrial supplies and materials.
Meanwhile, the value of exports also showed a sizable increase, rising by 2.9 percent to $186.8 billion in March from $181.5 billion in February.
The report also showed that the goods deficit widened to $67.6 billion in March from $61.1 billion in February, while the services surplus edged up to $15.8 billion from $15.7 billion.
Jennifer Lee, senior economist at BMO Capital Markets, said, "Bottom line here, good news that domestic demand didn't grind to a halt, like it appears to be doing in other parts of the world these days."
A separate report from the Labor Department showed that import prices fell by more than expected in the month of April, with the drop largely due to lower fuel prices.
The Labor Department said import prices fell by 0.5 percent in April after surging up by 1.5 percent in March. Economists had expected prices to edge down by about 0.2 percent.
At the same time, the report showed that export prices rose by 0.4 percent in April following a 0.8 percent increase in March. Export prices had been expected to increase by about 0.2 percent.
by RTT Staff Writer
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