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US trade deficit shrinks to $38.8 bn in March

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(Globalpost/GlobalPost)

The US trade deficit shrank 11 percent in March from February as consumer goods imports fell, government data released Thursday showed.

The Commerce Department reported the trade gap narrowed to $38.8 billion, from a revised $43.6 billion in February, the second month in a row that the deficit narrowed.

A sharp drop in imports reduced the gap in March as consumer spending declined, a further sign of a slowdown in the economy. Imports totaled $223.1 billion, down from $229.6 in February.

Exports also declined, but by a lesser amount, to $184.3 billion from $186.0 billion the prior month.

The country's trade balance in goods and services with the rest of the world was better than most analysts expected. The average estimate was for a $43.0 billion deficit.

"This improvement is expected to lead to an upward revision to first-quarter GDP growth when the second estimate is released," said Patrick O'Hare of Briefing.com.

The government initially reported first-quarter gross domestic product growth of 2.5 percent; the second estimate is scheduled on May 30.

Imports of consumer goods, including clothing and appliances, dropped 7.5 percent in March to $41.8 billion.

Crude oil imports, which account for nearly 10 percent of the goods imported into the United States, fell 8.4 percent to $21.6 billion in March.

The volume of imported crude oil fell to 7.0 million barrels a day, the lowest level since March 1996.

The three-month moving average for the deficit rose marginally, to $42.3 billion from $42.1 billion.

The closely watched US trade gap with China shrank a hefty 24 percent from February to $17.9 billion, its lowest level since March 2010, according to country data that is not seasonally adjusted.

The US gap with its top trade partner Canada narrowed 11 percent to $2.3 billion.

With Mexico, its other big North America partner, the deficit increased 24 percent to $5.3 billion.

The trade deficit with the 17-nation eurozone rose 2.8 percent to $8.3 billion.

The weaker export data "is worrisome as it reflects continued weak demand in Europe where the recession may persist for longer than expected," said Tu Packard of Moody's Analytics.

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http://www.globalpost.com/dispatch/news/afp/130502/us-trade-deficit-shrinks-388-bn-march-0