U.S. Trade Deficit Nearly Unchanged As Imports, Export Both Increase

A report released by the Commerce Department on Tuesday showed the U.S. trade deficit was nearly unchanged in February, as imports and exports both increased.

The Commerce Department said the trade deficit narrowed by less than $0.1 billion to $89.2 billion in February. Economists had expected the deficit to narrow to $88.5 billion from the $89.7 billion originally reported for the previous month.

The trade deficit was little changed as the value of imports jumped by $4.1 billion or 1.3 percent to $317.8 billion, while the value of exports surged by $4.1 billion or 1.8 percent to $228.6 billion.

The increase in the value of imports was largely due to a spike in the value of imports of industrial supplies and materials, particularly crude oil, which helped offset a steep drop in imports passenger cars.

Meanwhile, notable increases in the value of exports of drugs and industrial supplies and materials contributed to the advance in the value of exports.

The report also showed the goods trade deficit narrowed to $107.5 billion in February from $108.6 billion in January, while the services trade surplus shrank to $18.3 billion from $19.4 billion.

“The February data failed to fully capture the downstream impact of Russia’s invasion of Ukraine on trade flows, which will unfold slowly in the coming months and potentially longer if the war persists,” said Mahir Rasheed, U.S. Economist at Oxford Economics.

“Given our broad-based downward revisions to global growth in 2022 and 2023, we believe geopolitical headwinds will squeeze demand for U.S. exports this year,” he added. “Conversely, imports should remain on a steady footing, though growth is expected to moderate.”

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