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US Trade Deficit Widens Slightly in January

March 8, 2023
"Overall, trade flows have slowed on a shift in demand for services from goods and weaker global growth," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

The U.S. trade deficit widened in January on a pickup in imports, to mark the biggest gap in three months, according to government data released on Wednesday.

The overall trade gap grew $1.1 billion from December to $68.3 billion in January, according to Commerce Department data, amid a rise in consumer goods imports along with that of autos and parts.

The deficit widened slightly less than anticipated, and the latest figures come as households shift more spending to services instead of goods while consumers grapple with stubborn inflation.

January imports rose $9.6 billion from December to $325.8 billion, while exports picked up by $8.5 billion to $257.5 billion.

In the fourth quarter last year, the U.S. trade deficit with China slipped $30.2 billion to $63.0 billion, the latest report showed.

"Overall, trade flows have slowed on a shift in demand for services from goods and weaker global growth," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

"Growth prospects in the U.S. and abroad will drive the trend going forward," she said.

Last year, the U.S. trade gap widened to a record on robust imports and strong spending.

While the Federal Reserve has lifted interest rates multiple times over the course of the year to cool demand, spending has remained more resilient than anticipated.

"The rebound in trade flows to start the year signals that the economy continues to carry momentum, but we do not expect the strength to be sustained in the months ahead," said Matthew Martin, U.S. economist at Oxford Economics, in a note.

"Imports and exports are likely to weaken as consumers and businesses pull back, leading the deficit to move mainly sideways through the first half of the year," he added.

Copyright 2023, Agence France-Presse

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