US goods trade deficit widens in March as imports rise sharply

[WASHINGTON] The US trade deficit in goods widened more than expected in March as a rise in imports outpaced exports, suggesting that trade was likely a drag on economic growth in the first quarter.

The goods trade gap increased 5.3 per cent to US$87.9 billion last month, the Commerce Department’s Census Bureau said on Wednesday (Apr 29). Economists polled by Reuters had forecast the goods trade deficit at US$86.95 billion. It totalled US$83.5 billion in February.

The Census Bureau has resumed publication of the so-called advance indicators report, which includes the goods trade deficit and wholesale and retail inventories, having suspended the releases following last year’s government shutdown.

The data are key inputs for the advance estimate of first-quarter gross domestic product, due to be released on Thursday.

Imports of goods increased US$9.6 billion to US$299.3 billion, reflecting an 11.0 per cent surge in motor vehicles. There were also solid increases in imports of food, consumer and capital goods as well as industrial supplies.

Some of the imports ended up as inventory at warehouses. Wholesale inventories increased 1.4 per cent, while stocks at retailers climbed 0.7 per cent. That could limit the anticipated drag on GDP growth from the wider goods trade deficit.

SEE ALSO

US consumer confidence unexpectedly climbs on jobs outlook

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

Goods exports increased US$5.2 billion to US$211.5 billion in March amid rises in shipments of food, motor vehicles, capital goods and industrial supplies, which include petroleum. But exports of consumer goods dropped 7.5 per cent.

Economists expected the US-Israeli war with Iran, which has disrupted oil shipments and raised crude prices, to boost goods exports in the months ahead. The US is a net oil exporter.

A Reuters survey of economists is forecasting that GDP increased at a 2.3 per cent annualised rate last quarter. Economic growth nearly stalled in the fourth quarter, with GDP rising at only a 0.5 per cent pace. REUTERS