• A small narrowing had been expected.

• Both exports and imports increased but at a slower pace than in December.

• Net exports begin Q1 on course to be a slight drag on overall GDP growth in Q1.

The advance estimate of the U.S. trade deficit in goods widened slightly to $83.74 billion in January from $83.19 billion in December. The Action Economics Forecast Survey had expected a small narrowing to $82.9 billion deficit. Exports rose 1.4% m/m (-0.7% y/y) after a 4.6% m/m jump in December. Imports increased 1.1% m/m (8.2% y/y), their smallest monthly gain since last September, following a 1.4% m/m advance in December. The small widening in the deficit in January put net exports on a course to exert another slight drag on overall GDP growth in Q1. Net exports subtracted 1.55%-pt from GDP growth in Q4 2020.

The performance of exports in January varied markedly across end-use categories. Exports of industrial supplies and materials jumped up 5.5% m/m, their largest monthly gain since August, and exports of capital goods except autos increased 3.9% m/m. In contrast, auto exports fell 5.0% m/m and exports of foods, feeds and beverages declined 4.5% m/m. The increase in imports in January was led by a 6.4% m/m rise in foods, feeds and beverages and a 5.4% m/m increase in imports of nonfood consumer goods excluding autos. Auto imports fell 4.7% m/m and imports of other goods slumped 12.8% m/m.

The advance international trade data can be found in Haver's USECON database. The expectation figure is from the Action Economics Forecast Survey, which is in AS1REPNA.

Note: Current month is based on Advance Trade data; Previous months reflect revised data from International Trade release.