US goods trade deficit widens as exports decline
2023.03.28 09:31
© Reuters. FILE PHOTO: Shipping containers are unloaded from a ship at a container terminal at the Port of Long Beach-Port of Los Angeles complex, in Los Angeles, California, U.S., April 7, 2021. REUTERS/Lucy Nicholson
By Lucia Mutikani
WASHINGTON (Reuters) – The U.S. trade deficit in goods widened modestly in February as exports declined, potentially setting up trade to be a small drag on economic growth in the first quarter.
The trade deficit increased 0.6% to $91.6 billion, the Commerce Department said on Tuesday. Economists polled by Reuters had forecast the goods trade deficit would be little changed at $91.0 billion.
“Today’s results leave the average nominal goods shortfall for the first two months of this quarter at $91.4 billion, which is roughly a billion dollars higher than the average for all of the fourth quarter,” said Lou Crandall, chief economist at Wrightson ICAP (LON:) in Brooklyn, New York.
“With the services surplus on track for a decline this quarter, net exports seem likely to exert a mild drag on the first-quarter GDP calculations after having added about half a percentage point to growth in the fourth quarter.”
Goods exports dropped 3.8% to $167.8 billion last month. The decline was led by an 11.9% plunge in shipments of motor vehicles and parts. Exports of consumer goods decreased 4.6%, while industrial supplies, which include petroleum, fell 4.2%.
Exports of food and capital goods also fell. But exports of other goods rose 4.5%.
Imports of goods slipped 2.3% to $259.5 billion. Imports of motor vehicles and parts tumbled 7.1%, while those of consumer goods dropped 5.6%. There were also decreases in imports of food and industrial supplies. But imports of capital goods as well as other goods increased.
Despite the overall decline in imports, businesses restocked goods at a steady clip in February.
The Commerce Department also reported that wholesale inventories rose 0.2% in February after falling 0.5% in January.
Stocks at retailers jumped 0.8% after gaining 0.1% in January. They were boosted by a 1.9% acceleration in motor vehicle inventories, which followed a 0.4% gain in January.
Excluding motor vehicles, retail inventories rose 0.4% after being unchanged in January. This component goes into the calculation of gross domestic product.
A smaller trade deficit and the piling up of unsold goods at businesses were the contributors to the economy’s 2.7% annualized growth rate in the fourth quarter. The Atlanta Federal Reserve early on Tuesday was forecasting that first-quarter GDP would increase at a 3.2% pace.
