U.S. Goods-Trade Deficit Widened to a Fresh Record in March
The U.S. merchandise-trade deficit widened to a new record in March as the value of imports surged to a fresh high.
The deficit grew to $90.6 billion from $87.1 billion in February, according to Commerce Department data released Wednesday. Economists in a Bloomberg survey had called for an $88 billion shortfall in March.
Imports rose 6.8% to $232.6 billion, while exports climbed 8.7% to $142 billion, the highest since 2018.
Demand from American consumers stuck at home during Covid-19 has been sending U.S. merchandise imports to repeat records. Ports have been overwhelmed after the sudden stoppage of trade at the start of the pandemic last year and then the rush of purchasing that followed, even as exports remain sluggish.
Freight rates soared after the trade boom late last year caught container producers off guard, sending them scrambling to meet a surge in demand.
The blockage of the Suez Canal by a massive container ship upended global trade in March caused further trade complications, stranding some 90 bulk carriers and causing a rethinking of typical routes.
Automakers have cut production after a surge in orders for items such as smartphones, TVs and computers left less capacity for a stronger-than-expected rebound in vehicle demand. President Joe Biden is proposing $50 billion for semiconductor manufacturing and research as part of a push to address the shortage.
Carmakers are pushing for a portion of the money to be reserved for vehicle-grade chips, warning of a potential 1.3 million shortfall in car and light-duty truck production in the U.S. this year if their industry isn’t given priority.
Overall, the value of U.S. exports plus imports surged to $347.7 billion in March, signaling a rebound in trade as the world recovers from the pandemic.
Automotive-vehicle imports advanced rose to $30.2 billion. Vehicle exports increased to $12.8 billion.
The jump in imports was reflected in a big increase in wholesale inventories. Those stockpiles rose 1.4%, matching the largest gain since February 2012.
Retail inventories retreated 1.4%, the most since June, reflecting a sharp decline at motor-vehicle dealers.
The trade picture will come into greater focus when the final report, which includes services, is released on May 4.
©2021 Bloomberg L.P.