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Economic Report: U.S. trade deficit in goods slips for first time in three months after setting record

The numbers: The U.S. trade deficit in goods fell slightly in February to $106.6 billion to mark the first decline in three months, but the gap stayed near an all-time high and is unlikely to fall much in the near future.

An early or advanced look at the trade gap in goods showed that it slipped from $107.6 billion in January, the U.S. Census Bureau said.

Last year, the U.S. posted the highest trade deficit ever. The goods deficit topped $1 trillion for the very first time.

An advanced estimate of wholesale inventories, meanwhile, showed a 2.1% increase in February. And retail inventories rose 1.1%, according to an early estimate.

Key details: U.S. imports of goods such as oil and consumer electronics edged up 0.3% to $263.7 billion in February. Those increases offset a big decline in imports of autos and food.

The rising price of petroleum has been adding to higher U.S. deficits.

Exports of American-made goods rose 1.2% to $157.2 billion and were just below a record high.

Imports have flirted repeatedly with new record highs over the past year, largely because the U.S. economy recovered rapidly from the pandemic and Americans could afford to resume their free-spending ways.

Exports have rebounded more slowly as other countries try to catch up, but they are now hitting record highs too.

The full trade report forFebruary, which includes services such as tourism and travel, comes out next week.

Big picture: Bigger U.S. trade deficits subtract from gross domestic product, the official scorecard for the economy. Yet the big increases in retail and wholesale inventories add to GDP and signal the economy likely expanded as a solid pace in the first quarter.

Market reaction: The Dow Jones Industrial Average

and S&P 500

 were set to open mildly higher in Monday trades. Stocks have rallied over the past week.

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