By Yuka Hayashi 

WASHINGTON -- The U.S. trade deficit widened in January as American consumers stepped up purchases of imported products.

The deficit in trade of goods and services expanded by 1.9% to a seasonally adjusted $68.2 billion in January, the Commerce Department said Friday, compared with a $66.97 billion gap in December. Analysts polled by The Wall Street Journal had projected a deficit of $67.6 billion.

Imports increased 1.2% to $260.2 billion from December, while exports grew 1.0% to $191.9 billion.

Americans splurged on consumer goods in January, helped by $600 payments many received as part of the latest round of government stimulus spending to fight the impact of the pandemic. Retail sales jumped a seasonally adjusted 5.3% in January from the previous month, the biggest increase since June.

With the global economy on a recovery path, exports also expanded modestly, bolstered by higher shipments of industrial supplies and capital goods. Many countries loosened restrictions on economic activity at a quicker pace as Covid-19 cases fell sharply from their peak around the new year.

In January, the U.S. deficit in trade in goods with China declined to $26.25 billion from $27.23 billion in December. Exports to China fell 12.2% to $12.86 billion, while imports declined 6.6% to $39.11 billion.

Under the so-called Phase One trade agreement signed with the Trump administration, China committed to boosting its imports of certain U.S. products in agriculture, manufacturing and energy by a combined $200 billion between 2020 and 2021.

China fell far short of its purchase goal for 2020, and its imports of covered products in January came to $9.82 billion, down from and average of $11.2 billion in the previous three months, according to an analysis by Panjiva, a research unit of S&P Global Market Intelligence.

The company projects China must increase its monthly imports of the covered items to an average of $14.8 billion to meet its purchase goal for 2021.

Katherine Tai, who is expected to be confirmed as U.S. Trade Representative in coming days, said during a Senate hearing last week that she would use all tools available to "ensure that China lives up to its obligations in the agreement."

Write to Yuka Hayashi at yuka.hayashi@wsj.com

(END) Dow Jones Newswires

March 05, 2021 09:23 ET (14:23 GMT)