The US trade deficit continued to widen in February, hitting a record high as consumer and business demand kept imports at elevated levels relative to export shipments.
According to data published by the Commerce Department on Wednesday, America’s trade gap of both goods and services soared to a record-breaking $71.1 billion in February, up by 4.8% from the month prior. The median forecast by economists polled by Reuters called for a shortfall of $70.5 billion. The Commerce Department also revealed that America’s trade deficit with Canada rose by $2.2 billion to $4 billion in February, as exports fell by $0.5 billion, and imports increased by $1.7 billion.
Total imports fell by 0.7% to $258.3 billion, as ongoing global supply chain disruptions caused goods imports to decline by 0.9%. However, the import of capital goods soared to a record-high, while industrial supplies and materials also hit the highest since October 2018. Total US exports also suffered a decline in February, falling by 2.6% to $187.3 billion, as the export of goods tumbled 3.5% to $131.1 billion amid abnormally cold weather conditions that enveloped major parts of the country.
The US trade deficit has been steadily increasing each month since falling to a three-year low in February 2020. Merchandise imports have flooded the country’s ports, causing shortages of shipping containers. This forced freight rates to skyrocket, forcing US domestic producers to scramble to find available containers during a time when inventories are subdued.
Information for this briefing was found via the US Commerce Department. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
