US Foreign-Trade Deficit Narrowed in March

  • US Foreign-Trade Deficit Narrowed in March

US Foreign-Trade Deficit Narrowed in March

Canada's trade deficit hit a record 4.14 billion Canadian dollars (about 3.21 billion US dollars) in March as imports increased more than exports, Statistics Canada said on Thursday.

A second report from the Labour Department showed hourly worker compensation accelerated at a 3.4% rate in the first quarter after rising at a 2.4% pace in the October-December period.

Rising exports of petroleum and agricultural staples as well as a steep drop in imports sent the monthly United States trade deficit plunging to $49 billion, a 15.2% drop from February, the biggest decrease in more than two years.

The figures which were brought out represented a mixed and a blended picture for the the trade sector.Policy makers will be reassured by a rise in exports and signs of dissipating railway bottlenecks, while the jump in imports implies trade acted as a major drag on first-quarter growth.

On the other hand, the report said the value of imports tumbled by 1.8 percent to $257.5 billion in March from $262.1 billion in February.

What happened: Exports advanced 2% to $208.5 billion and set a new record.

"This ever-expanding trade deficit is like the ghost of Trump trade promises past that is haunting the USA negotiators now in Beijing trying to remedy the debacle of our China trade policy and those trying to conclude a NAFTA replacement deal that ends the outsourcing incentives and thus could win broad support", said Lori Wallach, director of Public Citizen's Global Trade Watch.

Big picture: The sharp drop in the trade deficit in March prevented a steeper decline in gross domestic product, the official scorecard for the US economy. Data for February was revised slightly to show the trade gap widening to US$57.7 billion, which was the highest level since October 2008, instead of the previously reported US$57.6 billion.

Exports to China jumped 26.3 percent in March. The economy grew at a 2.9% rate in the fourth quarter.

Prices for US Treasuries were trading higher, while the dollar was little changed against a basket of currencies.

"Some of the investment-related products were up solidly as were some of the consumer products", said Doug Porter, chief economist at BMO Capital Markets.

Over the past three years, the worsening of the non-oil trade deficit has been comparable in magnitude to the worst part of the 2000s "China shock" period, reaching 3.5 percent of GDP between 2014 and 2017 compared to 3.6 percent of GDP between 2002 and 2005. In a separate report, the Labor Department said initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 211,000 for the week ended April 28.

Another report from the Commerce Department showed factory goods orders rose 1.6% in March after a similar increase in February. Crude oil imports dropped by $0.5 billion in March.