Washington, DC, United States (4E) – Trade deficit in the U.S. rose to a five-month high in February as demand for the nation’s exports declined while imports posted a modest gain.
The deficit climbed to $42.3bn, which was 7.7 percent above the shortage in January of $39.3bn, according to the Commerce Department report released Thursday. The median forecast of 69 economists surveyed by Bloomberg News forecast a reduction to $38.5bn.
American exports fell 1.1 percent to $190.4bn as sales of farm goods, computers and commercial aircraft slowed down. Imports edged higher 0.4 percent to $232.7bn, which underlines the increase in imports of clothing and autos, offseting a decline in crude oil that has fallen to its lowest level in over three years.
The bigger trade deficit is a drag on economic recovery as American companies are generating less money abroad compared to what their foreign counterparts are making in the U.S.
February’s wider deficit prompted some economists to lower their forecast for overall economic growth in the first quarter of the year.
Economists said the trade deficit will likely keep narrowing in 2014 as exports, boosted by a production boom in U.S. energy, expand faster than imports. The country’s deficit with China fell sharply by 25.1 percent in February to $20.9bn.