Exporting came out swinging in February but American consumers tightened their wallets by spending less as well – PB/TK
U.S. trade deficit falls as exports hit two-year high – Reuters April 4, 2017
WASHINGTON (Reuters) – The U.S. trade deficit fell more than expected in February as exports increased to a two-year high and slowing domestic demand weighed on imports.
The Commerce Department said on Tuesday the trade gap declined 9.6 percent to $43.6 billion. January’s trade deficit was revised down to $48.2 billion from $48.5 billion.
Economists polled by Reuters had forecast the trade gap falling to $44.8 billion in February.
When adjusted for inflation, the deficit decreased to $59.7 billion, with exports of goods the highest on record. The real trade deficit was $65.1 billion in January.
Despite the drop in the real trade deficit, trade will likely be a small drag on gross domestic product in the first quarter after subtracting 1.82 percentage points from fourth-quarter growth.
In addition to trade, weak consumer spending also likely constrained the economy in the first three months of the year.
The Atlanta Federal Reserve is forecasting GDP rising at a 1.2 percent rate in the first quarter, a deceleration from the 2.1 percent pace logged in the October-December period.
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