The U.S. 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% to $87.9 billion last month, the Commerce Department's Census Bureau said on Wednesday. Economists polled by Reuters had forecast the goods trade deficit at $86.95 billion. It totaled $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 $9.6 billion to $299.3 billion, reflecting an 11.0% 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%, while stocks at retailers climbed 0.7%. That could limit the anticipated drag on GDP growth from the wider goods trade deficit.
Goods exports increased $5.2 billion to $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%.
Economists expected the U.S.-Israeli war with Iran, which has disrupted oil shipments and raised crude prices, to boost goods exports in the months ahead. The U.S. is a net oil exporter.
A Reuters survey of economists is forecasting that GDP increased at a 2.3% annualized rate last quarter. Economic growth nearly stalled in the fourth quarter, with GDP rising at only a 0.5% pace.
Source: aol