The US trade deficit narrowed slightly in March, as a decline in imports was tempered somewhat by a plunge in exports.

The trade deficit contracted 0.1 per cent to US$69.4 billion, the Commerce Department’s Bureau of Economic Analysis said on Thursday (May 2). Data for February was revised to show the trade gap widening to US$69.5 billion instead of US$68.9 billion as previously reported. Economists polled by Reuters had forecast the deficit climbing to US$69.1 billion in March.

Trade, through a surge in imports, was a large drag on gross domestic product in the first quarter. The economy grew at a 1.6 per cent annualised rate last quarter, after expanding at a 3.4 per cent pace in the October-December period.

Imports dropped 1.6 per cent in March to US$327.0 billion. Goods imports fell 1.6 per cent to US$263.8 billion. There were decreases in imports of motor vehicles and parts as well as industrial supplies and materials, which include crude oil.

But imports of consumer goods increased to US$3.0 billion, boosted by pharmaceutical preparations. Capital goods imports were the highest on record. Services imports fell US$1.1 billion to US$63.2 billion, pulled down by transport and travel.

Exports tumbled 2.0 per cent to US$257.6 billion. Goods exports plummeted 2.9 per cent to US$171.3 billion. There were decreases in exports of capital goods, industrial supplies and materials, and foods, feeds and beverages. Exports of services fell US$0.2 billion to US$86.4 billion. REUTERS

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