Trade deficit shrinks as imports fall 3.6%

Washington

AMERICA's trade deficit shrank more than forecast in March as imports fell in percentage terms by the most in seven years and outpaced a decline in shipments overseas.

The gap narrowed 13.9 per cent to US$40.4 billion, the smallest since February 2015, the Commerce Department reported on Wednesday. The median forecast in a Bloomberg survey called for a US$41.2 billion deficit.

Imported merchandise declined 3.6 per cent, the most since February 2009, as American companies strived to get inventories in line with weaker first-quarter demand. At the same time, shipments overseas fell for the fifth time in six months amid soft global sales.

"The most troubling thing was in the consumer sector - we're not exactly sure what's going on there and whether it's sort of a one-off effect", in terms of the slump in imports, Jay Bryson, global economist at Wells Fargo Securities LLC, in C…