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US trade deficit shrinks to $43 bn in February

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(Globalpost/GlobalPost)

The US trade deficit edged lower in February due largely to a decline in crude oil imports, government data released Friday showed.

The Commerce Department reported the trade gap shrank to $43 billion, down from the revised $44.5 billion in January.

The decline, which came after the trade deficit widened a sharp 16.7 percent in January, surprised analysts who had projected a deficit of $44.7 billion.

A big factor in the narrowing trade gap was a more than five percent drop in crude oil imports, to $23.6 billion.

The overall trade patterns, excluding oil, suggested the trade gap will still deliver a further hit to US gross domestic product growth, said Jim O'Sullivan, chief US economist at High Frequency Economics.

US exports grew 0.8 percent to $186 billion, strengthened by exports of industrial goods (up 4.5 percent) and automobiles (up 1.6 percent).

Meanwhile, US imports held at $228.9 billion.

"Encouragingly, real goods exports are up at a 4.5 percent annual rate so far in Q1, a turnaround from -5.5 percent in Q4," O'Sullivan said.

But US imports of foreign automobiles rose 4.6 percent between January and February, hitting $24.8 billion.

On a 12-month basis, the US trade deficit dropped by 3.5 percent.

The much-watched US trade deficit with China declined to $23.4 billion from $27.8 billion in the prior month.

The US trade deficit with countries in the Organization of Petroleum Exporting Countries, or OPEC, fell to $3.6 billion from $6.4 billion.

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http://www.globalpost.com/dispatch/news/afp/130405/us-trade-deficit-shrinks-43-bn-february-1