U.S. Trade Deficit Widens To New Record High In January
Reflecting a jump in imports and a steep drop in exports, the Commerce Department released a report on Tuesday showing the U.S. trade deficit widened by more than expected in the month of January.
The Commerce Department said the trade deficit widened to $89.7 billion in January from a revised $82.0 billion in December.
Economists had expected the deficit to climb to $87.1 billion from the $80.7 billion originally reported for the previous month. With the bigger than expected increase, the trade deficit reached a new record high.
“Our outlook sees exports growing faster than imports this year as domestic demand moderates, particularly in the second half of the year,” said Mahir Rasheed, U.S. Economist at Oxford Economics.
“However, the recent appreciation of the dollar amid war in Europe may curb export demand while imports become relatively cheaper,” he added. “Conversely, with inflation risks tilted to the upside, imports face similar headwinds if consumption cools more than expected.”
The wider trade deficit came as the value of imports shot up by 1.2 percent to $314.1 billion in January after surging 1.7 percent to $310.3 billion in December.
The report showed notable increases in imports of automotive vehicles and parts, industrial supplies and materials and foods, feed and beverages.
Meanwhile, the value of exports tumbled by 1.7 percent to $224.4 billion in January after jumping by 1.5 percent to $228.3 billion in December.
The sharp pullback in exports reflected a steep drop in exports of pharmaceuticals as well as significant decrease in exports of travel services.
The report also showed the goods deficit widened to $108.9 billion in January from $101.8 billion in December, while the services surplus fell to $19.2 billion from $19.8 billion.
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