U.S. Trade Deficit Increases to One-Year High

The trade deficit in the U.S. widened in March to the highest level in more than a year as the cost of imported oil climbed and companies restocked shelves with goods bought abroad.
TradingEconomics.com, Bloomberg 5/12/2010 9:45:02 AM

The gap grew 2.5 percent to $40.4 billion, the most since December 2008, Commerce Department figures showed. The value of imported crude climbed to the highest level since October 2008.

A rebounding American consumer, combined with business spending on new equipment and inventories, means imports may keep growing. Gains in exports, which benefited from expanding economies in Asia that gave companies such as Cummins Inc. and Dow Chemical Co. a lift, will probably be more limited as the European debt crisis pushes the dollar up against the euro.

The Commerce Department revised the February deficit down to $39.4 billion from a previously estimated $39.7 billion.

Goods and services purchased abroad and those sold overseas both increased to the highest levels since October 2008.

Imports climbed 3.1 percent in March to $188.3 billion, led by a $2.76 billion surge in crude oil and increasing demand for foreign-made automobiles.

The rise in oil reflected higher prices and volumes, and helped push U.S. imports from Mexico to a record. The average price of a barrel of crude for the month was $74.32, the highest since October 2008.

Excluding petroleum, the trade gap shrank to $15.6 billion from $16.4 billion in February.

Surging growth in emerging Asian and Latin American countries is propelling demand for U.S. goods. Exports increased 3.2 percent to $147.9 billion, reflecting sales of generators, semiconductors and industrial supplies such as petroleum products.

The trade surplus with the so-called newly industrialized countries, which include Singapore and Korea, climbed to a record in March. The deficit with China widened.

After eliminating the influence of prices, which are the numbers used to calculate gross domestic product, the trade deficit grew to $43.8 billion in March from $42.3 billion. The March figure was in line with what the government estimated last month, indicating trade will not factor into revisions for first- quarter growth due later this month.

U.S. Trade Deficit Increases to One-Year High