The U.S. trade deficit grew to the widest in three months at the start of 2023, reflecting a pickup in imports of merchandise.

The trade gap in goods and services increased 1.6% to $68.3 billion in January from a month earlier, Commerce Department data showed March 8. The figures aren’t adjusted for inflation. The median estimate in a Bloomberg survey of economists called for a $68.7 billion gap.

The value of imports increased 3% to $325.8 billion, while exports climbed to $257.5 billion.
 
A resilient domestic economy helped bolster demand for imports, while a months-long slide in the dollar likely helped drive overseas purchases of American-made goods.

On an inflation-adjusted basis, exports of consumer goods and motor vehicles and parts climbed to a record, while the real value of capital goods shipments overseas was the highest since March 2019.

Furthermore, less shipping congestion and a normalization of global supply chains have generally helped facilitate trade between the U.S. and other countries.

“The rebound in trade flows to start the year signals that the economy continues to carry momentum, but we do not expect the strength to be sustained in the months ahead,” Oxford Economics economists Matthew Martin and Ryan Sweet said in a note.

Prior to March 8’s report, the Federal Reserve Bank of Atlanta’s GDPNow estimated net exports would add about 0.6 percentage point to growth in the first quarter of 2023. That would be slightly more than trade added in the fourth quarter.

While the nominal goods-trade deficit narrowed slightly, the January merchandise shortfall on an inflation-adjusted basis widened to $101.8 billion, also the biggest in three months.

Digging Deeper

•    U.S. goods exports, unadjusted for price changes, increased for the first time since August. The gain was broad and included pickups in pharmaceuticals and other consumer goods, capital equipment and autos.
•    Travel exports — or spending by visitors to the U.S. — dropped to $12.1 billion
•    Travel imports, a measure of Americans traveling abroad, increased to $11.9 billion, matching a record
•    U.S. goods-trade deficit with China, on an unadjusted basis, widened to $25.2 billion from $23.5 billion