The U.S. trade deficit widened in March for the first time in eight months as the global economic slump pushed exports to the lowest level in more than two years.
The gap expanded 5.5 percent to $27.6 billion, smaller than forecast, from a nine-year low of $26.1 billion in February, Commerce Department figures showed today in Washington. Imports also decreased as a drop in demand for industrial supplies such as natural gas and steel offset an increase in oil.
The report signals that most of the improvement in the U.S. trade deficit may already be over as fuel costs climb and stimulus programs resuscitate American consumers’ demand. Rising imports and a bigger trade gap would hurt economic growth, blunting some of the benefit from a rebound in exports that companies such as Caterpillar Inc. are beginning to detect.
“The recovery seems to be under way in the U.S. and other than in China there seems to be quite a bit of weakness overseas, which suggests that imports will recover before exports,” said Chris Low, chief economist at FTN Financial in New York. Still, he said, there remains “pretty remarkable weakness in imports” as companies slash inventories.
The dollar, which had fallen earlier in the day, remained lower after the report. The U.S. currency was down 0.6 percent at $1.3665 per euro at 9:03 a.m. in New York.