- Imports rise by most since 2015, outpacing export gains
- Trump administration says data show ‘much work to be done’
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 $48.5 billion, matching the median forecast in a Bloomberg survey, Commerce Department figures showed Tuesday. 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 $43 billion to $49.6 billion. The Commerce Department left the shortfall for December at the initially reported $44.3 billion.
The data also showed the merchandise trade gap with China, the world’s second-biggest economy, widened to $31.3 billion in January from $27.8 billion on an unadjusted basis. However, the trade deficit with Mexico narrowed to $3.9 billion, the smallest since July 2015.
Commerce Secretary Wilbur Ross said Tuesday that the latest data show “there is much work to be done” on trade agreements and enforcement. “President Trump has made free and fair trade a central part of his agenda, and correcting this imbalance is an important step in achieving that goal,” Ross said in a statement.
The Commerce Department’s data showed imports increased to $240.6 billion in January, also the highest since December 2014, from $235.3 billion in the prior month. Imports of automobiles and parts climbed to a record, while petroleum products were the highest in two years. The value of imported capital equipment was the largest since April 2015.
Full article: Trade Deficit in U.S. Widens to Largest in Almost Five Years (Bloomberg Markets)