U.S. Trade Deficit Widens to Ten-Month High in February

The U.S. trade deficit in goods and services (BOP basis) increased to $68.9 billion in February after rising to $67.6 billion in January, revised from $67.4 billion. December’s deficit was un revised at $64.2 billion, according to the U.S. Census Bureau. The deficit was the largest since April 2023 which was $72.2 billion. A $67.0 billion deficit had been expected in the Action Economics Forecast Survey. Exports rose 2.3% (4.1% y/y) in February following a 0.1% rise in January. Imports rose 2.2% (2.8% y/y) in February, the third straight month of moderate gain.

The trade deficit in goods trade (BOP basis) narrowed to $91.4 billion in February from $91.7 billion in January. Goods exports rose 2.9% (2.8% y/y) after holding steady in January. Imports of goods rose 1.8% (2.2% y/y), up for the third straight month. The services trade surplus lessened to $22.5 billion in February from $24.1 billion in January and it was down from a peak $25.2 billion last August. Services exports rose 1.0% (6.8% y/y) in February, the fourth consecutive monthly gain. Services imports jumped 3.9% (5.4% y/y) following a 1.1% January rise.

The real (inflation-adjusted) goods trade deficit (customs value; chained 2017 dollars) widened to $87.0 billion in February, the largest deficit in seven months, from $86.0 billion in January. Real exports of goods rose 2.1% (5.4% y/y) in February after easing 0.4% in January. Real imports of goods grew 1.7% (2.9% y/y), the third straight monthly rise. A narrowing of the trade balance (net exports) added 0.25% percentage points to GDP growth in Q4 2023 after adding 0.03%-points in Q3 2023.

The customs value goods trade deficit narrowed to $90.3 billion in February from $90.6 billion in January. The latest figure was smaller than a $91.8 billion deficit in the advance report released on March 29. Custom value exports rose 2.9% (3.7% y/y) in February after a 0.1% January improvement. Automotive vehicles, parts & engines fell 8.5% (+1.7% y/y) while nonfood consumer goods excluding autos rose 0.7% (-2.7% y/y). Capital goods exports excluding autos rose 2.9% (8.0 y/y) while exports of industrial supplies & materials increased 4.8% (3.8% y/y). Foods, feeds & beverages exports rose 12.4% (2.7% y/y).

Customs value imports of goods rose 1.8% (2.3% y/y) in February, the third consecutive monthly increase. Automotive vehicles, parts & engines imports rose 2.6% (15.8% y/y) while capital goods imports excluding autos rose 0.9% (3.9% y/y). Foods, feeds & beverage imports increased 7.6% both m/m and y/y. Goods imports of industrial supplies & materials edged 0.2% higher (-7.6% y/y) and nonfood consumer goods excluding autos rose 2.6% (1.3% y/y). Meanwhile, petroleum imports rose 2.3% (-6.8% y/y) in February following a 7.5% January decline. Nonpetroleum imports grew 1.7% (3.7% y/y), the third straight monthly gain.

The rise in services exports reflected a 1.5% increase (12.5% y/y) in personal, cultural & recreational services and a 2.7% (25.1% y/y) rise in travel services exports. Exports of construction services declined 3.7% (-7.1% y/y) while government goods & services exports declined 3.3% (-21 .5% y/y). The increase in services imports was due to construction services imports which rose 3.1% (39.4% y/y) while travel services imports gained 9.3% (18.5% y/y). Imports of transport services rose 8.8% (6.1% y/y) and charges for the use of intellectual property eased 0.3% (+3.2 y/y) in February.

The U.S. goods trade deficit with China eased to a seasonally adjusted $21.9 billion in February from $22.9 billion in January. Exports fell 1.0% (+2.9% y/y) while imports fell 3.1% (-6.2% y/y). The goods trade deficit with the European Union eased to $17.6 billion from $18.1 billion in January as exports fell 4.5% (+1.1% y/y) and imports were down 3.8% (-1.5% y/y). The trade shortfall with Japan fell to $6.2 billion in February from the record high of $7.3 billion in the previous month. Exports rose 2.4% (-6.9% y/y) while imports fell 7.1% (-0.4% y/y).

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.