March Trade Deficit $51.4B, Up from February’s $35.9B

WASHINGTON — The latest U.S. trade data were far worse than expected, and will cut first quarter gross domestic product numbers substantially.

The U.S. March trade balance was a $51.4 billion deficit, its worst showing since October 2008. This compares to just a $35.9 billion shortage in February, when volumes were depressed by a West Coast port work stoppage and poor weather in the East.

March imports posted a $17.1 billion increase and exports grew $1.6 billion as ports cleared backlogs from the Pacific region.

The worse-than-expected result showed the highest goods deficit since August 2008 and the biggest percentage movement in the trade balance since December 1996. The result will cut real GDP by another 0.7 to 1 point.

Imports included consumer goods with a $9 billion surge. Included in this category was cell phones at a $1.7 billion increase, apparel rose $1.3 billion, and furniture gained $1 billion. In addition, autos posted a $2.7 billion increase, and capital goods grew $4 billion as machines and computers rose.

Capital and consumer goods and non-oil imports all reached their highest levels on record.

Exports of aircraft and engines posted a $700 million rise and of autos gained $792 million.

March imported crude prices fell to the lowest since 2009 and volume was higher, but the petroleum gap narrowed to $7.7 billion from $8.2 billion in February. This confirms that the March trade movement was a goods story.

The unadjusted trade balances by country included: China a $31.2 billion deficit after a $22.5 billion shortfall in February, Japan a $7.1 billion deficit after a $4.2 billion shortage, and OPEC a new high a $1.2 billion surplus after a $719 million surplus. Imports also surged from South Korea and Taiwan.

Additional data on related-party trade for 2014 showed that this accounted for 42.3% or $1.667 trillion of total goods trade. This is consistent with historic figures. Related-party trade includes trade by U.S. companies with their subsidiaries abroad as well as trade by U.S. subsidiaries of foreign companies with their parent firms.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.
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