U.S. Trade Gap Narrows in February

The sharp drop in the U.S. trade gap in February was led by a 1.7% drop in imports from the prior month. U.S. exports also fell, by 1.4%.

After hitting a seven-month high in January, the U.S. trade deficit narrowed in February, official data showed on April 12.

The trade gap fell to a seasonally adjusted $45.8 billion from a revised $47.0 billion in January, the Commerce Department said.

The January and February data typically pose a calculation challenge because of the movable Lunar calendar for the Chinese new year, when economic production in the Asian giant slows sharply.

China, the top exporter to the United States, had a trade deficit in February this year.

The sharp drop in the U.S. trade gap in February was led by a 1.7% drop in imports from the prior month. U.S. exports also fell, by 1.4%.

Americans snapped up imported consumer goods, pushing them to a record high of $44.1 billion.

Rising oil prices appeared to weigh on petroleum imports. The volume of U.S. oil imports -- 242 million barrels -- was the lowest in 12 years. But the average price per barrel leaped 3.4% from the prior month to $87.17.

The United States posted a trade deficit with all its major trade partners. In data unadjusted for seasonal factors, the gap with Canada narrowed to $2.89 billion, while that with Mexico widened to $5.26 billion.

With the 17-nation eurozone, the U.S trade deficit swelled to $6.23 billion.

The trade gap with China shrank sharply, to $18.84 billion from $23.27 billion in January.

"Washington has focused a lot on budget deficits this year, but scant attention has been paid to the trade deficit. That must change. The trade deficit serves as a drag on GDP growth and requires financing, just like any other debt. While only 9.5% of our national debt is financed by China, that nation is responsible for fully 70% of our trade deficit in non-oil goods,"said Scott Paul, Executive Director of the Alliance for American Manufacturing (AAM).

AAM points out that year over year the goods trade deficit with China is also running ahead of 2010. January-February 2010 totaled $34.8 billion, while the first two months of 2011 have already reached $42.1 billion. The group explains that China now accounts for 70% of our overall monthly non-oil goods deficit ($27.0 billion).

Copyright Agence France-Presse, 2011

TAGS: The Economy
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