WASHINGTON – The U.S. trade deficit narrowed sharply in March as exports increased, which could position trade to continue contributing to economic growth in the second quarter.
The trade deficit contracted 9.1 percent to $64.2 billion, the Commerce Department said on Thursday. Data for February was revised to show the trade gap widening to $70.6 billion instead of $70.5 billion as previously reported.
Exports increased 2.1 percent to $256.2 billion. Goods exports shot up 3.1 percent to $174.3 billion. Crude oil exports rose $2.5 billion, boosting shipments of industrial supplies and materials.
There were also increases in exports of motor vehicles, parts and engines. Exports of services rose $0.1 billion to a record $81.8 billion, driven by travel and transport.
Imports slipped 0.3 percent to $320.4 billion, with goods falling 0.5 percent to $260.9 billion. The decline in imports in March was likely flagging softening business investment as the lagged and cumulative effects of higher interest rates start to be felt.
Capital goods imports fell $1.9 billion, pulled down by semiconductors, electric apparatus and excavating machinery. There were also decreases in imports of crude oil and organic chemicals.
But consumer goods imports increased $2.4 billion, lifted by pharmaceutical preparations, other textile apparel and household goods. Imports of cellphones and other household goods decreased $1.5 billion. Imports of services increased $0.1 billion to $59.5 billion, supported by travel. Transport services fell.
Adjusting for inflation, the goods trade deficit narrowed 4.4 percent to $99.4 billion. Real dollar exports of petroleum were the highest since the government started tracking the series in 1994.
A smaller trade deficit was one of the contributors to the economy’s 1.1 percent annualized growth rate in the first quarter. Trade has contributed to GDP growth for four straight quarters, a trend that economists expect will persist into this quarter.