The trade deficit in the U.S. unexpectedly widened in February to the highest level in five months as exports of fuels and capital equipment dropped.
The gap widened by 7.7 percent to $42.3 billion, the biggest since September, from the prior month’s $39.3 billion, Commerce Department figures showed today in Washington. The median forecast in a Bloomberg survey of 69 economists called for a reduction to $38.5 billion. Imports were little changed.
“Trade is going to be a little bit of a drag for first-quarter growth,” said Guy Berger, a U.S. economist at RBS Securities in Stamford, Connecticut, who had forecast a widening of the gap. Beyond that, “factors favor a gradual narrowing of the trade deficit. Exports will increase as many of the emerging markets are still expanding, and while Europe is not doing great, it is growing. Imports will rise as the economy gets better.”
Service industries in the U.S. picked up in March after expanding at the slowest pace in four years, showing the biggest part of the economy was starting to thaw along with the weather, another report today showed. The Institute for Supply Management’s non-manufacturing index rose to 53.1 from 51.6 in February, the Tempe, Arizona-based group said today. Readings greater than 50 signal expansion. The median projection in a Bloomberg survey of economists called for a gain to 53.5.
Exports decreased 1.1 percent to $190.4 billion, depressed by declining sales of refined petroleum products. Fuel shipments to overseas customers had climbed in prior months as U.S. energy production grew.
Sales of U.S.-made products to buyers in South and Central America were the weakest since February 2011.
Read more at: Bloomberg