U.S. Trade Deficit Widened in February

The U.S. trade deficit in goods and services (BOP basis) widened to $70.5 billion in February from a slightly revised $68.7 billion in January (previously $68.3 billion). This was the third consecutive month in which the deficit had widened. A $68.8 billion deficit had been expected in the Action Economics Forecast Survey. Exports fell 2.7% m/m (+8.1% y/y), their fifth monthly decline in the past six months, following an upwardly revised 3.6% m/m increase in January (previously +3.4%). Imports also fell in February after two consecutive monthly increases. They declined 1.5% m/m (+0.6% y/y) following an upwardly revised 3.3% monthly gain in January (previously +3.0%).

The widening in the goods and services deficit in February was due entirely to a widening of the goods trade deficit—to $93.0 billion from $90.3 billion in January. Goods exports tumbled 4.8% m/m after a 6.0% monthly jump in January. By contrast, the services surplus widened to $22.4 billion in February from $21.6 billion in the previous month. Exports of services increased 2.1% m/m following a 1.2% monthly decline in January. Imports of services rose 1.4% m/m in February on top of a 1.5% monthly increase in January.

The real (inflation-adjusted) goods trade deficit widened for the third consecutive month to $104.6 billion (chained 2012 dollars) from $101.8 billion in January. Both real exports and real imports fell in February. A narrowing of the real trade deficit over the second half of 2022 was a major contributor to the rebound in GDP. However, the widening of the real deficit thus far in Q1 points to the deficit turning into a drag on overall GDP in Q1.

The custom value goods trade deficit widened to $92.0 billion in February from $91.3 billion in January. Custom value exports fell 3.8% m/m following a 4.9% monthly jump in January. The February decline was widely spread across end-use categories, led by 11.9% m/m drop in auto exports, a 5.8% m/m decline in exports of consumer goods ex autos, and a 4.1% m/m fall in exports of industrial supplies and materials. Customs value imports decreased 2.2% m/m in February after a 3.7% monthly increase in the previous month. The monthly decline was also widely spread, led by a 7.6% monthly decline in auto imports, the first in three months, a 5.5% m/m drop in imports of consumer goods ex autos, and a 3.4% m/m decrease in exports of foods and feeds. Petroleum imports edged up 0.3% m/m in February while nonpetroleum exports dropped 2.5% m/m.

The 2.1% m/m increase in services exports was relatively widely spread. It reflected a 11.1% m/m jump in travel exports, the largest monthly gain since April 2022, a 5.5% m/m gain in exports of maintenance and repairs services, and a 1.0% m/m increase in exports of personal, cultural and recreational services. The 1.4% monthly increase in services imports was concentrated in transport services (+5.6% m/m, their first monthly gain in five months). By contrast, imports of travel services slipped 0.2% m/m in February after a 9.5% monthly jump in January.

The goods trade deficit with China widened to a seasonally adjusted $25.2 billion in February from $21.9 billion in January. Exports slumped 9.7% m/m after a 15.2% m/m surge in January while imports rose 5.0% for their third consecutive monthly increase. The goods trade deficit with the European Union narrowed slightly to $18.1 billion February from $18.5 billion in January. The trade shortfall with Japan was little changed at $5.7 billion from $5.6 billion in the previous month.

The international trade data, including relevant data on oil prices, can be found in Haver's USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.