US trade deficit fell in February to $46 billion
WASHINGTON (AP) — The U.S. trade deficit fell in February to its lowest point in four months. American exports rose to an all-time high while imports dropped.
The narrower deficit could lead economists to upward revise their growth estimates for the January-March quarter.
The Commerce Department said Thursday that the trade deficit decreased 12.4 percent to $46 billion in February, down from $52.5 billion in January.
Exports edged up 0.1 percent to a record $181.2 billion. U.S. businesses sold more goods in Europe, China and other parts of the world.
Imports dropped 2.7 percent to $227.2 billion, after hitting a record high in January. Oil imports fell, as did imports of foreign cars and machinery.
A narrower trade deficit will weigh less on growth because it means businesses sold more American-made goods overseas while U.S. consumers bought fewer foreign-made products.
Most economists expect growth slowed in the January-March quarter to an annual rate of less than 2.5 percent, down from 3 percent at the end of last year.
"February's U.S. trade data are better than expected and suggest that net trade wasn't as large a drag on growth in the first quarter as previously looked likely," said Paul Dales, senior U.S. economist at Capital Economics.
The deficit with the 27-nation European Union dropped 30.2 percent to $5.9 billion. U.S. exports to the region rose 6.7 percent. Europe represents about 20 percent of America's export market.
The U.S. deficit with China fell 25.6 percent in February to $19.4 billion, the lowest level since March 2011. For all of 2011, the deficit with China hit a record $295.5 billion, the highest deficit ever recorded with a single country.
China earlier this week reported that it returned to a trade surplus with the rest of the world in March after posting a rare global trade deficit in February. Chinese export industries have been hurt by economic problems in Europe and the economic slowdown last year in the United States.
With millions of Americans still unemployed, political pressure has grown in the United States to impose economic sanctions on China. Critics say China has undervalued its currency against the dollar. That has made Chinese goods cheaper in the U.S. and American products more expensive in China.
For February, imports of petroleum products dropped to $37.3 billion, the lowest level since October. The average price for a barrel of imported crude oil was $103.63 in February, down only slightly from $103.81 in January.
World prices for crude oil have risen from around $75 last October to a peak of $110 in March.
U.S. exports rose largely because businesses sold more airplanes, industrial machinery and railway transportation equipment overseas. Those gains offset a drop in sales of U.S.-made autos and auto parts.
In addition to the fall in oil imports, imports of foreign-made cars dropped by $1 billion and imported consumer products such as clothing, toys and textiles fell by $2.7 billion.
President Barack Obama will join more than 30 heads of state in Cartagena, Colombia, this weekend for the Summit of the Americas. The administration hopes to use the trip to boost U.S. trade ties with fast growing markets in Latin America.
Obama's first stop will be in Tampa on Friday where he will give a speech on the benefits of trade with this region of the world, which accounts for 40 percent of U.S. exports.