Bigger US trade gap in March
Source: Bloomberg News |
May 12, 2011, Thursday
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Print Edition
Print Edition
THE United States trade deficit widened more than forecast in March as the highest oil prices in more than two years boosted imports, eclipsing record exports.
The trade gap rose 6 percent to US$48.2 billion, the biggest since June, from US$45.4 billion in February, the Commerce Department reported yesterday in Washington. The median forecast of 72 economists surveyed by Bloomberg News projected it would widen to US$47 billion. Sales abroad climbed by the most in 17 years.
Crude oil costs that surged above US$100 a barrel for the first time in more than a year and a 9.4 percent drop in the dollar will probably keep driving up the cost of imports. At the same time, the weaker currency is making American goods more competitive to customers in emerging markets from Argentina to China, benefiting manufacturers like United Technologies Corp and Caterpillar Inc.
"With higher oil prices we're likely to see the deficit widen a bit in the near term" said Gus Faucher, director of macroeconomics at Moody's Analytics Inc in West Chester, Pennsylvania, who forecast a US$48.3 billion deficit. "We're going to see the deficit stay within this range. The weaker dollar will help support exports and limit import growth somewhat."
The dollar held earlier gains against the euro after the report on concern Greece will be forced to restructure its debt. The euro fell to US$1.4343 at 8:47am in New York from US$1.4409 on Tuesday. The dollar also gained against the yen, rising to 81.13 from 80.88 late Tuesday.
Estimates in the Bloomberg News survey ranged from US$43 billion to US$49.3 billion. The department had previously estimated the February shortfall at US$45.8 billion.
Imports climbed 4.9 percent to US$220.8 billion, the highest level since August 2008, from US$210.4 billion. A jump in fuel prices and increasing demand for autos and computers led the gain.
A barrel of crude oil cost an average US$93.76 in March, the most since September 2008, the department said. Excluding petroleum, the trade gap shrank to US$16.9 billion from US$20 billion in February.
Exports rose 4.6 percent, the biggest gain since March 1994, to US$172.7 billion. Increasing demand overseas for autos, chemicals and industrial machinery contributed to the advance. The gain also reflected record sales to customers in South and Central America, and the highest purchases from countries in the European Union since June 2008.
The trade gap with China narrowed to US$18.1 billion from US$18.8 billion in February. Exports to China climbed 13 percent, while US imports rose 1.2 percent.
The dollar's 9.4 percent drop from June 7, 2010, to March 31 against a weighted basket of currencies from the country's biggest trading partners is making US-made goods cheaper abroad and foreign-made goods more expensive in the US.
Combined with growth in emerging economies such as Brazil and India, the drop in the dollar will continue to help lift exports.
The trade gap rose 6 percent to US$48.2 billion, the biggest since June, from US$45.4 billion in February, the Commerce Department reported yesterday in Washington. The median forecast of 72 economists surveyed by Bloomberg News projected it would widen to US$47 billion. Sales abroad climbed by the most in 17 years.
Crude oil costs that surged above US$100 a barrel for the first time in more than a year and a 9.4 percent drop in the dollar will probably keep driving up the cost of imports. At the same time, the weaker currency is making American goods more competitive to customers in emerging markets from Argentina to China, benefiting manufacturers like United Technologies Corp and Caterpillar Inc.
"With higher oil prices we're likely to see the deficit widen a bit in the near term" said Gus Faucher, director of macroeconomics at Moody's Analytics Inc in West Chester, Pennsylvania, who forecast a US$48.3 billion deficit. "We're going to see the deficit stay within this range. The weaker dollar will help support exports and limit import growth somewhat."
The dollar held earlier gains against the euro after the report on concern Greece will be forced to restructure its debt. The euro fell to US$1.4343 at 8:47am in New York from US$1.4409 on Tuesday. The dollar also gained against the yen, rising to 81.13 from 80.88 late Tuesday.
Estimates in the Bloomberg News survey ranged from US$43 billion to US$49.3 billion. The department had previously estimated the February shortfall at US$45.8 billion.
Imports climbed 4.9 percent to US$220.8 billion, the highest level since August 2008, from US$210.4 billion. A jump in fuel prices and increasing demand for autos and computers led the gain.
A barrel of crude oil cost an average US$93.76 in March, the most since September 2008, the department said. Excluding petroleum, the trade gap shrank to US$16.9 billion from US$20 billion in February.
Exports rose 4.6 percent, the biggest gain since March 1994, to US$172.7 billion. Increasing demand overseas for autos, chemicals and industrial machinery contributed to the advance. The gain also reflected record sales to customers in South and Central America, and the highest purchases from countries in the European Union since June 2008.
The trade gap with China narrowed to US$18.1 billion from US$18.8 billion in February. Exports to China climbed 13 percent, while US imports rose 1.2 percent.
The dollar's 9.4 percent drop from June 7, 2010, to March 31 against a weighted basket of currencies from the country's biggest trading partners is making US-made goods cheaper abroad and foreign-made goods more expensive in the US.
Combined with growth in emerging economies such as Brazil and India, the drop in the dollar will continue to help lift exports.
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