U.S. January Trade Deficit $68.2 Billion; Consensus Deficit $67.6 Billion -- 2nd Update
By Yuka Hayashi
WASHINGTON -- The U.S. trade deficit widened in January as
American consumers stepped up purchases of computers, cellphones,
flat-screen TVs and other 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
Imports increased 1.2% to $260.2 billion from December, while
exports grew 1.0% to $191.9 billion. Imports have returned to
pre-pandemic levels after dropping sharply starting in March.
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. Imports of pharmaceuticals
rose sharply in January, and higher prices drove up the value of
imported crude oil and petroleum products.
With the global economy recovering, exports also expanded
modestly, bolstered by shipments of petroleum products, industrial
machinery and semiconductors. Many countries loosened restrictions
on economic activity at a quicker pace as Covid-19 cases fell
sharply from their peak around the new year.
"Trade flows continue to recover and will pick up once the
global economy reopens," Rubeela Farooqi, chief U.S. economist for
High Frequency Economics, said in a research note. She added that
imports are likely to outweigh exports in the near term because of
the relatively strong recovery in the U.S. economy.
While shipments of goods recovered, trade in services remained
depressed amid continuing travel restrictions. Exports of services
declined by 0.5% to $56.3 billion in January from December. Imports
of services fell 0.9% to $39 billion.
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 email@example.com
(END) Dow Jones Newswires
March 05, 2021 11:26 ET (16:26 GMT)
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