Higher oil prices pushed the US trade deficit close to all-time highs in March despite an improvement in exports, according to official figures released yesterday.
The trade gap climbed 10 per cent to $64 billion, the US Commerce Department said, surprising Wall Street economists who were expecting a modest expansion.
The widening deficit belies an improving performance by the US export sector, which has increased shipments in recent months to meet global demand.
Peter Kretzmer, a senior economist at Bank of America, said the widening gap in March was likely to lead to a downward revision in estimates of first quarter economic "growth to near or just below 1 per cent, annualised".
"On balance, the report implies more drag on GDP growth from trade in the first quarter than [ previously] assumed," he said.
However, Haseeb Ahmed, an economist with JPMorgan, said the underlying figures had "very favourable implications for second-quarter growth". He predicted that some of the key factors behind the widening gap were likely to reverse in the second quarter.
US exports had another strong showing in March, rising 1.8 per cent to $126.2 billion. Exports to the EU, and specifically to Germany, set records. Exports to China also reached a record, helping to lower the politically sensitive trade deficit with the country by 6.4 per cent to $17 billion for the month as Chinese imports also dropped.
The recent improvement in exports also helped narrow the overall trade gap for the first quarter of the year to $181 billion from $192 billion in the same period last year.
But a rise in the average price of a barrel of foreign oil to $53 from $50.71 helped drive up the value of US imports by 4.5 per cent to $190 billion.
- (Financial Times service)
