Trade Deficit Balloons But ...
The United States trade deficit widened to $31.5 billion in February as Americans' appetite for foreign-made goods increased in a reflection of the budding economic recovery.
The Commerce Department reported Wednesday that the deficit was 11.6 percent higher than January's trade gap of $28.2 billion. The February trade gap of $31.51 billion was the largest since the April 2001 tally of $31.94 billion. The Commerce Department also said that when imports of oil and petroleum were factored out, the February trade gap was the largest on record.
Imports of goods and services rose nearly 4 percent to $110.7 billion in February.
Americans' demand for imports is improving as the U.S. economy is on the mend from a recession that began in March 2001. Cheaply priced imports also are motivating buyers.
Because U.S. exports of goods and services didn't rise as quickly as imports in February, the trade gap expanded. Exports went up 1.2 percent to $79.2 billion. Countries around the globe are recovering from a worldwide economic slowdown less quickly than the United States, thus restraining their demand for U.S. exports.
American manufacturers see another problem damping demand for their goods: The high-flying U.S. dollar, which has risen in value by 30 percent against other currencies since 1997. That makes U.S. exports more expensive for foreigners to buy, but it makes the cars, TVs and other foreign goods that Americans crave cheaper.
Imports of cars and trucks along with parts and engines jumped to $16.5 billion in February, the highest level since October 2000.
Imported consumer goods, including TVs, toys and furniture rose to $24.4 billion in February, and clothing. Imported capital goods, such as semiconductors and telecommunications equipment, also was up, growing by $480 million to $23.8 billion.
On the exports side, sales of American-made capital goods dropped by $237 million in February to $23.6 billion. Airplanes, semiconductors and drilling equipment posted the biggest losses for the month.
But those declines were offset by other export gains. Exports of foods, feeds and beverages rose to $4.3 billion in February, the highest level since February 1998. Sales of American-made cars and consumer goods to other countries also rose.
The latest snapshot of trade activity comes as President Bush wants Congress to pass legislation that would give him authority to negotiate new trade agreements, something that has generated much controversy.
The House passed a measure by just one vote in December. Democrats contend that package does not offer enough protection for U.S. workers and the global environment.
The Democratic-controlled Senate has a package that includes environmental rights and aid for import-displaced American workers.
The trade report also showed that oil imports dipped to $4.03 billion in February. That reflected a drop in the volume of crude oil shipments to 243.5 million barrels, the lowest level since February 1999. However, the price per barrel rose 25 cents to $16.56 in February.
The United States' trade deficit with Japan widened to $5.7 billion in February. U.S. exports to the country fell to $3.9 billion, the lowest level since January 1994.
America's trade gap with China narrowed a bit to $6.5 billion in February from $6.9 billion.