U.S. Trade Deficit Widens to Record during February

• Exports fall sharply with economic weakness abroad.

• Imports decline modestly.

• Oil price rise softens import decline.

The U.S. trade deficit in goods and services widened to $71.1 during February following a deepening to $67.8 billion in January, revised from $68.2 billion. The deficit was a record for this measure which dates back to January 1992. The Action Economics Forecast Survey anticipated a $70.5 billion deficit.

Exports fell 2.6% (-10.0% y/y), the first decline in nine months. Imports were off 0.7% (+5.0% y/y), also the first decline since May of last year.

The trade deficit in goods increased to a record $88.0 billion in February from $85.2 billion in January. The advance trade data reported earlier showed an $86.7 billion goods deficit. Exports of goods declined 3.6% (-5.1% y/y) as nonauto consumer goods exports weakened 5.8% (-5.1% y/y), down sharply for the second straight month. Capital goods exports fell 5.9% (-12.5% y/y) while auto exports weakened 5.6% (-10.6% y/y), about as they did in January. Imports of goods weakened 1.0% (10.5% y/y), the first decline in nine months. Auto imports fell 10.7% (-7.8% y/y), down sharply for the second straight month while nonauto consumer goods imports fell 4.2% (+18.8% y/y). Capital goods imports edged 0.3% higher (14.4% y/y).

Petroleum imports increased 8.7% in February (-12.3% y/y) as prices rose. In constant dollars, oil imports fell 1.5% (-11.6% y/y), the third decline in four months. Nonoil imports weakened 1.5% (+12.4% y/y), off for the first time since May.

The February trade surplus in services narrowed to $16.9 billion. It was the smallest surplus since January 2012, down from a peak surplus of $26.6 billion in March 2018. The value of services exports eased 0.4% (-19.6% y/y) for the second straight month, reflecting a 1.5% decline (-69.6% y/y) in travel exports. Charges for the use of intellectual property were off 0.3% (+4.2 y/y). Imports of services edged 0.6% higher (-17.4% y/y) after a 1.2% decline. Travel imports declined 1.5% (-72.9% y/y). Intellectual property imports edged 0.1% higher (-11.5% y/y).

The goods trade deficit with China deepened in February to a seasonally adjusted $30.3 billion. Exports fell 30.4% (+38.8% y/y) and imports declined 3.5% (+49.5% y/y). The trade deficit with Japan narrowed sharply to $4.5 billion and the deficit with the European Union narrowed slightly to $19.0 billion.

The international trade data, including relevant data on oil prices, can be found in Haver's USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey, which is carried in AS1REPNA.