May 20, 2018

US Trade Deficit Falls 15% to $49 Billion

05 May 2018, 01:31 | Ken Black

Canada's trade deficit grew to an all-time record of $4.1 billion in March

Canada's trade deficit grew to an all-time record of $4.1 billion in March

The international-trade deficit in goods and services shrank 15.2% from a month earlier to a seasonally adjusted $48.96 billion in March, the Commerce Department said Thursday.

U.S. exports rose by 2 per cent month-on-month in March to...

Economists had expected the trade deficit to narrow to $50.0 billion from the $57.6 billion originally reported for the previous month.

This means that Canada posted the largest trade deficit in our nation's history in March, with the gap between imports and exports reaching $4.14 billion.

Imports from the US rose 3.1 per cent in March due in large part to higher imports of passenger cars and light trucks, while exports to the USA rose 1.2 per cent, led primarily by higher exports of crude oil.

During the first quarter of the year, nevertheless, the United States trade deficit grew 18 per cent from the same period in 2017, with exports rising 6.8 per cent and imports increasing 9.1 per cent.

Economists who critique the significance of bilateral deficits nonetheless agree that large sustained overall trade deficits can suppress demand and slow economic growth. There were also increases in exports of soybeans, corn and crude oil.

Meanwhile, U.S. exports climbed 2% from February to their highest dollar value on record including larger shipments overseas of civilian aircraft, soybeans, corn and crude oil. -China trade and the North American Free Trade Agreement (NAFTA), Public Citizen said today.

Several analysts also pointed to the timing of Lunar New Year, which began in mid-February, as a possible source of recent import volatility.

Imports from China (+26.6 percent) led the increase, mainly on higher imports of computers and peripheral equipment, and of communications and audio and video equipment. Gross domestic product grew a respectable 2.3% in the first quarter of 2018.

The trade gap has continued to rise since Trump entered the White House partly because the US economy is strong and American consumers have an appetite for imported products and the confidence and financial wherewithal to buy them. After improving from 2011 to 2016, but worsening in 2017, the NAFTA first-quarter 2018 goods deficit is up slightly relative to the first quarter of 2017 - an increase from $49.1 billion to $49.6 billion. The department, however, revised March orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, to show them falling 0.4 percent instead of dipping 0.1 percent as reported last month.

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