The trade deficit widened to a record $ 71.1 billion in Biden’s first full month

The U.S. trade deficit widened 4.8 percent to a record $ 71.1 billion in February, the Commerce Department said Wednesday.

Economists had forecast a trade gap of $ 70.4 billion. The January gap was revised down from $ 68.2 billion to $ 67.8 billion.

Both imports and exports fell in the month, but the rate of decline in exports was much faster, increasing the deficit. Imports fell seven tenths of a percentage point, but remain close to record highs. Exports fell 2.6 percent.

The goods trade deficit increased by $ 2.8 billion to $ 88 billion. The services surplus fell by $ 500 billion to $ 16.9 billion.

US exports have been affected by the return of blockades and the decline of economies around the world, particularly in Europe. US spending has been bolstered by the strength of the US economy, rising unemployment benefits and stimulus payments, and a large part of that spending is leaking to foreign producers through imports.

The record trade deficit means that a large part of the income earned by Americans is turning into income from foreigners. That reduces American household income and subtracts from gross domestic product.

Record trade deficits are expected to continue in the near term as the US economy continues to grow faster than the economies of our trading partners. Economists predict that the US economy will grow 6 percent or more this year.

So far this year, the deficit in goods and services has increased by $ 56.5 billion, or 68.6 percent, since the same period in 2020. So far this year, exports have decreased by $ 36.2 billion, or 8.7 percent. . Imports increased $ 20.3 billion or 4.1 percent. Comparisons with last year include the beginning of the pandemic, which weighed heavily on international trade.

Imports of motor vehicles and parts fell $ 3.4 billion, including a decrease of $ 1.8 billion in passenger cars. Car production has been affected around the world due to a shortage of semiconductors. Exports of vehicles and spare parts fell by $ 700,000 million.

Consumer goods imports decreased by $ 2.7 billion. Consumer goods exports fell $ 900 million.

Imports of industrial supplies and materials increased by $ 3.5 billion. Oil imports increased by $ 1 billion.

The deficit with China increased by $ 3.1 billion to $ 30.3 billion in February. Exports decreased by $ 4.5 billion to $ 10.4 billion and imports decreased by $ 1.5 billion to $ 40.6 billion.

U.S. service exports, which typically run in surplus and slightly offset long-standing goods deficits, have fallen during the pandemic, largely due to declining tourism. Travel services, for example, fell $ 100 million in February.

Source link