U.S. Trade Deficit Shrinks To Narrowest Since September 2016
April 02 2020 - 5:51AM
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Reflecting a steep drop in the value of imports, the Commerce
Department released a report on Thursday showing the U.S. trade
deficit narrowed significantly in the month of February.
The Commerce Department said the trade deficit narrowed to $39.9
billion in February from a revised $45.5 billion in January. The
deficit shrank to its lowest level since hitting $39.0 billion in
September of 2016.
Economists had expected the deficit to narrow to $40.0 billion
from the $45.3 billion originally reported for the previous
month.
The narrower deficit came as the value of imports plunged by 2.5
percent to $247.5 billion in February after slumping by 1.7 percent
to $253.8 billion in January.
Imports of capital goods showed a substantial decrease, with
imports of computers leading the way lower, while imports of
industrial supplies and materials and consumer goods also fell
sharply.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said
the steep drop in imports is "old news that mainly reflects the
lockdown in China."
"In one sense, lower imports are arithmetically good for
first-quarter GDP," he added. "But in this case, any decline is
likely to be offset by a matching run-down in inventories."
Meanwhile, the report said the value of exports fell by 0.4
percent to $207.5 billion in February after sliding by 0.6 percent
to $208.3 billion in January.
A notable decrease in exports of consumer goods was partly
offset by increases in exports of fuel oil and other petroleum
products and automotive parts and accessories.
The Commerce Department also said the goods deficit narrowed to
$61.2 billion in February from $67.1 billion in January, while the
services surplus slipped to $21.3 billion from $21.6 billion.
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