U.S. Trade Deficit Declines as Imports Slump

UA Volkswagen AG Jetta is driven off a ship at the Georgia Ports Authority Colonel's Island auto import and export terminal in Brunswick, Georgia. Photographer: Stephen Morton

U.S. trade deficit shrank more than expected in March as imports plunge outpaced a decline in exports.

The deficit gap narrowed 13.9 percent to $40.4 billion, making it the smallest since February 2015, the Commerce Department reported Wednesday.

Merchandise imported declined 3.6 percent as American companies strived to get inventories in line with demand experienced in the first-quarter of the year. Exports fell for the fifth time in six months as soft global sales continue to undermine exports.

“The most troubling thing was in the consumer sector — we’re not exactly sure what’s going on there and whether it’s sort of a one-off effect,” in terms of the slump in imports, Jay Bryson, global economist at Wells Fargo Securities LLC, in Charlotte, North Carolina, said before the report.

Still, “I think you’re going to see import growth outpace export growth as you go forward, and therefore trade will continue to be a modest headwind to growth in the U.S.,” he said.

In March, Imports fell to $217.1 billion from 225.1 billion recorded in February.The smallest since February 2011. The drop in imports was broad-based and includes consumer goods, industrial supplies and capital equipment.

Exports also decreased 0.9 percent from $178.2 billion to $176.6 billion.

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Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years experience as a foreign exchange research analyst and trader.

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