The U.S. trade deficit unexpectedly increased for a second straight month in February, raising concerns the economy's one standout performer...
WASHINGTON — The U.S. trade deficit unexpectedly increased for a second straight month in February, raising concerns the economy’s one standout performer could be starting to flag.
The Commerce Department reported Thursday that the deficit between what the U.S. imports and what it sells abroad rose 5.7 percent to $62.3 billion in February, the highest level since November.
Imports of goods and services shot up 3.1 percent to an all-time high of $213.7 billion, reflecting a big surge in imports of foreign cars.
Exports also set a record, rising 2 percent to $151.4 billion, reflecting strong gains in the sale of U.S. heavy machinery, computers and farm goods.
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For the first two months of this year, the deficit is running at an annual rate of $727.6 billion.
Last year, it fell to $708.5 billion for the entire year, fueled by a boom in exports. It was the first drop after five straight years of records.
With the economy battered by a prolonged housing slump and a severe credit crunch, trade has been one of the few sources of strength.
However, analysts said that based on the rising deficit in the first two months, trade will likely be less of a boost in the first three months of this year, making it more likely that the overall gross domestic product turned negative.
Brian Bethune, chief U.S. financial economist for Global Insight, said the big jump in auto imports in February may be reflecting a move by American consumers toward more fuel-efficient foreign cars, which would be another blow for struggling U.S. automakers.
Many analysts believe the two-month jump in the deficit will be reversed in coming months because they think a recession in the United States will cut into demand for foreign goods as well as U.S.-made products.
For April, the politically sensitive deficit with China dropped 9.6 percent to $18.4 billion, the lowest imbalance in a year.
The improvement reflected big declines in imports of clothing, computers, cellphones and other telecommunications equipment.
Even with the decline, the U.S. deficit with China remained the largest with any country. The next highest deficit was an imbalance of $6.9 billion with Japan.
America’s foreign oil bill fell 5.7 percent to $37.7 billion in February, marking the first monthly decline in a year.
With crude-oil prices hitting records above $110 per barrel, analysts believe the petroleum bill will resume rising in coming months.
The deficit with the European Union rose to $6.9 billion in February, up 13.5 percent from January. The increase occurred even though U.S. exports to Europe hit an all-time high, reflecting that the decline in the dollar to record lows against the euro has boosted the price competitiveness of American products.