WASHINGTON, May 2 (Reuters) – The U.S. trade deficit fell
more than expected in March as imports recorded their biggest
drop since 2009, the latest sign of slowing domestic demand.
The Commerce Department said on Thursday the trade gap
narrowed 11.0 percent to $38.8 billion – the second smallest
since January 2010.
February’s shortfall on the trade balance was revised to
$43.6 billion from the previously reported $43.0 billion.
Economists polled by Reuters had expected the trade deficit
to fall to $42.0 billion in March.
In March, the inflation-adjusted trade deficit narrowed to
$44.4 billion from $47.8 billion in February. Trade weighed on
first-quarter growth, cutting half a percentage point off gross
domestic product.
The economy grew at a 2.5 percent annual rate in the first
three months of the year and the smaller-than-expected trade gap
could cause the government to revise higher this estimate.
The smaller trade gap in February reflected a 2.8 percent
fall in imports of goods and services to $223.1 billion.
The percentage drop was the biggest since February 2009. The
decline in imports of goods was almost broad based, adding to
signs of sluggish domestic demand already flagged by weak retail
sales and manufacturing data.
In March, exports of goods and services slipped 0.9 percent
to $184.3 billion. Exports have been one of the bright spots in
the economy, but are being crimped by a slowing global economy,
which is hurting manufacturing.
A recent strengthening of the U.S. dollar, even though the
Federal Reserve has firmly remained on its ultra-easy monetary
path, is also taking the edge off export growth.
The dollar gained about 1.5 percent on a trade-weighted
basis so far this year.
The three-month moving average of the trade deficit, which
irons out month-to-to month volatility, edged up to $42.3
billion in the three months to March from $42.1 billion in the
prior period.
U.S. exports to the 27-nation European Union rose 14.4
percent in March to $22.9 billion. Exports to the EU in the
first three months of 2013 were down 8.0 percent compared to the
same period in 2012.
Exports to the United Kingdom fell. Exports to China, which
have been growing more slowly than in recent years, rose 1.4
percent in March.
China has been one of the fastest growing markets for U.S.
goods, and exports to that country were up 4.3 percent for the
first three months of 2013.
Imports from China fell 16.5 percent to $27.3 billion in
March, pushing down the contentious U.S. trade deficit with
China to $17.9 billion, the lowest since March 2010, from $23.4
billion in February.
