Jan. deficit highest on record
The US trade gap widened to a record level in January, as exports dropped and US demand for oil and consumer goods kept imports hovering near all-time highs.
The US deficit in international trade of goods and services rose to $43.06 billion in January from an upwardly revised shortfall of $42.69 billion in December, the Commerce Department reported Wednesday. The December deficit was previously reported at $42.48 billion. The January deficit was the highest on record, Commerce said.
The deficit was larger than Wall Street economists had expected. Ahead of the report, a Dow Jones -CNBC survey of 18 economists had forecast a deficit of $42.00 billion. The January figures confirm that imports continued to be a drag on economic growth heading into the first quarter of the year.
January imports fell 0.5% from December’s extremely high level to $132.10 billion. Record imports of petroleum products and consumer goods, plus big gains in imported industrial supplies prevented a steeper import decline. But exports fell even more, down 1.2% to $89.05 billion, pushing the overall trade gap wider.
Imports of consumer goods like toys, clothes, and household appliances rose $47 million to $29.33 billion. US demand for industrial supplies were up $659 million at $27.42 billion. Imports of capital goods, like aircraft, computers, and generators, fell $86 million to $26.82 billion.
The nation’s energy bill swelled to $11.41 billion in January, compared with $10.97 billion in December, as higher prices more than offset lower volume of imports. The average price of a barrel of crude oil climbed to $28.55 from $27.17. The US imported an average of 309.44 million barrels of oil, down from 317.38 in December, bringing the total value of crude oil imports to $8.84 billion for January.
US exports were depressed by a sharp $389 million drop in foods, feeds and beverages to $4.56 billion. Exporters of meat, poultry, soybeans and corn all experienced declines. Exports of industrial supplies like petroleum, cotton and chemicals fell $67 million to $15.21 billion, and exports of capital goods, including semiconductors and aircraft were off $198 million at $25.80 billion.
US exports of autos and auto parts fell $162 million to $6.78 billion, and exports of consumer goods fell $169 million to $7.75 billion.
Deficits with major trading partners were mostly higher in January, with the big exception of the European Union, whose currency, the euro, has appreciated sharply against the US dollar, particularly in the last quarter of 2003. The deficit with the euro area dropped to $4.75 billion in January, from $8.19 billion in December.
The US posted a $11.48 billion trade deficit with China, up sharply from $9.87 billion. The deficit with Japan narrowed slightly to $5.25 billion, but the US deficit rose against the rest of Asia, including Hong Kong, South Korea, Singapore and Taiwan. The shortfall with Canada rose to $5.22 billion, while the deficit with Mexico decreased slightly to $2.98 billion.