US trade deficit shrinks as goods imports hit five-year low
The U.S. trade deficit fell more than expected in March as imports of goods tumbled to their lowest level since 2010, a potential boost to first-quarter economic growth estimates that also hints at sluggish domestic demand.
The Commerce Department said on Tuesday the trade gap fell 13.9 percent to $40.4 billion, the smallest since February 2015, also as exports fell. February’s trade deficit was revised slightly down to $46.96 billion from the previously reported $47.1 billion. Economists polled by Reuters had forecast the trade deficit falling to $41.5 billion in March. When adjusted for inflation, the deficit declined to $57.4 billion from $63.2 billion in February.
The government reported last month that trade subtracted 0.34 percentage point from first-quarter gross domestic product, helping to hold down growth to an annual rate of 0.5 percent.
The smaller-than-forecast trade gap suggests that the advance GDP growth estimate could be bumped up when the government publishes its revised estimate later this month.
A strong dollar and soft global demand have hampered exports, but there are signs that some of the drag is starting to fade. The Institute for Supply Management reported on Monday that a gauge of export orders received by U.S. manufacturers rose in April for a second straight month, reaching its highest level since November 2014. Read more