The trade deficit widened for the second consecutive month in March to $40.4 billion, an increase of 2.5% from February, the Commerce Department said on May 12. The March gap, led by a huge jump in oil imports, was the biggest since December 2008 and in line with the average analyst forecast of $40.5 billion.
"This was a positive report for the U.S. and global growth outlook," said Nigel Gault, chief U.S. economist at IHS Global Insight. "It showed sharp increases in both export and import volumes, indicating that the world trade recovery still has plenty of momentum."
Exports increased 3.2% in March, to $147.9 billion, while imports rose 3.1% to $188.3 billion.
"The widening of the trade balance is a direct result of the strengthening in consumer demand," said Jeffrey Rosen, an analyst at Briefing.com. Rosen said the data indicated that firms expect consumer demand growth to remain strong.
"Out of the $5.6 billion increase in imports, $3.6 billion came from a pickup in industrial supplies and materials demand," he noted. Though some of the rise could be attributed to petroleum-based imports, "the return of manufacturing production in the U.S. was the basis for the jump in expenditures," he said.
The report provided further evidence of the manufacturing-led recovery in the U.S.: exports of goods reached their highest level since October 2008, as did imports of industrial supplies and materials.
In data on goods trade that was not seasonally adjusted, the gap with China, by far the largest U.S. imbalance, increased 2.4% to $16.9 billion.
With Canada, the biggest U.S. trade partner, the deficit however narrowed to $2.3 billion.
The shortfall in goods trade with the European Union surged to $7.1 billion from $5.3 billion in February.
With Mexico, the gap rose to $6 billion from $4.8 billion, while that with Japan rose by a billion dollars to $5.3 billion.
The gap with the Organization of the Petroleum Exporting Countries, the cartel that supplies about 40% of the world's crude, leaped 42% to $9.1 billion.
Copyright Agence France-Presse, 2010