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US trade deficit widens

15/01/2019 admin

The US trade deficit widened in February according to official data that raised hopes consumers are reopening their pocket books and businesses are replenishing stock.

The Commerce Department said Tuesday the US trade deficit had risen to 39.7 billion dollars in February, as the flow of products into the United States surged to 183 billion dollars for the month.

“As US producers and retailers seek to re-stock inventories, they will pull in more imports. This is a natural part of the recovery process,” said Nigel Gault, chief US economist for IHS Global Insight.

The deficit was slightly more than the 38.5 billion that had been expected by analysts. The deficit rose from a revised figure of 37.0 billion in January.

US Commerce Secretary Gary Locke hailed the figures as another sign of economic recovery. “Trade volumes are increasing in response to economic growth here and abroad,” he said in a statement.

Locke also vowed to further boost exports, which rose by 0.2 percent in February, weeks after President Barack Obama pledged to double the flow of US goods and services abroad.

“Increasing our exports is one of the important pillars in the administration’s job growth strategies,” Locke said.

The trade deficit with Japan widened 28.3 percent to 4.3 billion dollars worth of goods, while that with China fell to 16.5 billion dollars from 18.3 billion in January.

But the decrease in the US deficit with China appears unlikely to dampen criticism that Washington is not doing enough to press Beijing to strengthen its currency, which critics say provides a boon for Chinese exports.

“Subsidized manufactures from China and petroleum account for nearly the entire deficit, and both will rise as consumer spending and oil prices rise through 2010,” said Peter Morici, a professor at the University of Maryland.

While many economists lauded the figures as a sign of a rosier consumer spending, there was some concern that an increased imbalance could drag on US domestic production.

“It now appears that net exports will be a modest negative for first quarter GDP (gross domestic product),” said Aaron Smith of Moody’s Economy.com.