Trade Deficit in U.S. Widens to Largest in Almost Five YearsBy
Imports rise by most since 2015, outpacing export gains
Trump administration says data show ‘much work to be done’
The U.S. chalked up its largest trade deficit since March 2012 as a jump in merchandise imports in January exceeded a smaller gain in shipments overseas.
The gap in goods and services trade increased by 9.6 percent to $48.5 billion, matching the median forecast in a Bloomberg survey, Commerce Department figures showed Tuesday. The deterioration in January from the previous month reflected a 2.3 percent gain in imports, the most since March 2015, and a 0.6 percent pickup in exports.
Rising imports of consumer goods, capital equipment and motor vehicles reflect steady demand from American households and companies, with help from a stronger dollar. The wider deficit indicates trade, which subtracted 1.7 percent from fourth-quarter growth, will weigh on the economy in early 2017.
Bloomberg survey estimates ranged from a trade deficit of $43 billion to $49.6 billion. The Commerce Department left the shortfall for December at the initially reported $44.3 billion.
The data also showed the merchandise trade gap with China, the world’s second-biggest economy, widened to $31.3 billion in January from $27.8 billion on an unadjusted basis. However, the trade deficit with Mexico narrowed to $3.9 billion, the smallest since July 2015.
U.S. shortfalls with those countries are a focus of the Trump administration. President Donald Trump has said he wants to negotiate better terms with trading partners to trim the gap and boost economic growth.
Commerce Secretary Wilbur Ross said Tuesday that the latest data show “there is much work to be done” on trade agreements and enforcement. “President Trump has made free and fair trade a central part of his agenda, and correcting this imbalance is an important step in achieving that goal,” Ross said in a statement.
The Commerce Department’s data showed imports increased to $240.6 billion in January, also the highest since December 2014, from $235.3 billion in the prior month. Imports of automobiles and parts climbed to a record, while petroleum products were the highest in two years. The value of imported capital equipment was the largest since April 2015.
Exports increased to $192.1 billion in January, the highest since December 2014. The value of petroleum shipments overseas and automobiles picked up.
The petroleum deficit was the biggest since July 2015.
After eliminating the influence of prices, which renders the numbers used to calculate gross domestic product, the trade deficit grew to $65.3 billion in January from $62 billion in the prior month.
Net exports in the fourth quarter subtracted the most from GDP since the second quarter of 2010, according to previously reported figures that showed the overall economy grew at a 1.9 percent pace.