Washington - The US trade deficit narrowed in February to a four-month low as imports declined and exports improved amid a brighter outlook for global manufacturing, Commerce Department data showed on Tuesday.
Key points
Gap decreased 9.6% to $43.6bn from a revised $48.2bn in January Compares with $44.6bn median estimate of economists; January gap was originally estimated at $48.5bn Merchandise-trade deficit shrank to $65bn from $69.5bn; advance February figures showed $64.8bn last week
Big picture
As the gap shrank in February, global growth prospects were improving, giving US exporters a boost. Exports of goods and services reached the highest level since the end of 2014. The narrowing of the deficit may mean trade will be less of a drag on growth in the first quarter. Fading in dollar strength and a pickup in manufacturing sentiment could be a further boon to trade in the months ahead.
Imports declined in February by the most in nearly a year as demand for consumer goods and automobiles waned.
Just as some analysts attributed January’s deficit, the widest in almost two years, to a rush of shipments ahead of the Chinese New Year holiday, the February figure represented a reversal of that effect. China’s own trade data typically show big swings in January and February.
The Census Bureau figures showed America’s merchandise imports from China declined by $8.6bn in February on an unadjusted basis, the biggest drop on record. The US goods trade deficit with China narrowed to $23bn.
The government’s figures will provide critical context as the administration targets partners for better deals in the months ahead. Trump on Friday ordered a comprehensive study to identify trade abuses by other countries that have contributed to the US deficit, to be completed within 90 days.
President Trump will meet for the first time on Thursday with Chinese leader Xi Jinping, after Commerce Secretary Wilbur Ross labeled China last week as “one of the most protectionist” countries.
Other details
After eliminating the effects of price fluctuations, which generates the numbers used to calculate GDP, the gap narrowed to $59.7bn from $65.1bn. Imports decreased 1.8% to $236.4bn. Exports increased 0.2% to $192.9bn, the highest since December 2014 Value of shipments of motor vehicles and parts from the US was the highest since July 2014.
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