Executive Briefings

U.S. Trade Deficit Widens to Largest in 5 Years

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 $48.5bn, matching the median forecast in a Bloomberg survey, Commerce Department figures showed. 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 $43bn to $49.6bn. The Commerce Department left the shortfall for December at the initially reported $44.3bn.

Gap With China Widens

The data also showed the merchandise trade gap with China, the world’s second-biggest economy, widened to $31.3bn in January from $27.8bn on an unadjusted basis. However, the trade deficit with Mexico narrowed to $3.9bn, the smallest since July 2015.

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The gap in goods and services trade increased by 9.6 percent to $48.5bn, matching the median forecast in a Bloomberg survey, Commerce Department figures showed. 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 $43bn to $49.6bn. The Commerce Department left the shortfall for December at the initially reported $44.3bn.

Gap With China Widens

The data also showed the merchandise trade gap with China, the world’s second-biggest economy, widened to $31.3bn in January from $27.8bn on an unadjusted basis. However, the trade deficit with Mexico narrowed to $3.9bn, the smallest since July 2015.

Read Full Article