The United States’ trade deficit jumped by 4.8 per cent to $71.1bn in February, the country’s Commerce Department said on Wednesday, according to Reuters’ report.
The result showed that the U.S. trade deficit surged to a record high in February as the nation’s economic activity rebounded more quickly than that of its global rivals.
The economy is roaring as increased COVID-19 vaccinations and the White House’s $1.9trn pandemic rescue package boosts domestic demand, a chunk of which is being satiated with imports.
Economists polled by Reuters had forecast a $70.5bn deficit.
The goods trade gap was also the highest on record as imports slipped 0.7 per cent to $258.3bn, while imports of goods fell 0.9 per cent to $219.1bn.
The drop likely reflected supply-chain constraints, rather than weak domestic demand, it stated.
Imports of capital goods also hit a record high, while those of industrial supplies and materials were the highest since October 2018.
“Cargo ships have been forced to anchor outside the Los Angeles and Long Beach ports, where about a third of goods imports come through.
“This is as the ports struggle to unload the incoming ships,’’ Jay Bryson, the Chief Economist at Wells Fargo Securities in Charlotte, North Carolina, was quoted to have said.
The U.S. in February recorded its first petroleum deficit since December 2019, likely because of higher crude prices.
Further analysis of the result showed that U.S. exports dropped 2.6 per cent to $187.3bn, even as exports of goods tumbled 3.5 per cent to $131.1bn.
When adjusted for inflation, the goods trade deficit shot up to a record $99.1bn in February from $96.1bn in January.
The country’s economy however grew at a 4.3 per cent pace in the fourth quarter, but contracted by 3.5 per cent in 2020, the worst performance in 74 years.
Economists expect growth this year could top seven per cent, which would be the fastest since 1984, Reuters further said.
The International Monetary Fund has forecast the global economy to expand by six per cent this year, driven primarily by the U.S. economy, which the fund estimated would grow by 6.4 per cent.
From the labour market to manufacturing and the hard-hit services industries, activity accelerated sharply in March, the report added.
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