Thursday, March 10, 2011
US Trade Gap Surges In January; Will Hurt GDP
The U.S. trade deficit widened by an exceptionally large $6 billion in January, reaching $46.3 billion.
Imports jumped 5.2 percent, the most since March 1993, while exports grew 2.7 percent. The weaker dollar aided exports.
Higher oil imports played a big role in the trade gap; the U.S. imported 290.7 million barrels of crude oil in January.
That trend is sure to continue in February and March as crude prices spike in response to the Mideast crisis.
The surge in imports was not due to oil alone, but also to purchases of business equipment, industrial supplies and consumer goods.
A wider trade gap subtracts from gross domestic product growth. So, unless the gap reverses course sharply in February and March, trade will likely subtract from U.S. GDP growth this quarter.
That will be especially challenging for a nation still reeling from the after effects of the Great Recession.
The size of the trade gap is all the more amazing since exports, on both a nominal and price-adjusted basis, hit a record high in January.