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


(END) Dow Jones Newswires

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

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