U.S. trade deficit hits 9-month high in March

The U.S. trade deficit widened sharply in March to the highest level in nine months despite a new record high for exports of goods and services.

The trade deficit — that is, the difference between exports and imports — widened to $48.2 billion for the month from a downwardly revised $45.4 billion in February, originally reported as $45.8 billion.

Imports of goods and services rose by 4.9% to a seasonally adjusted $220.8 billion during March, while exports rose 4.6% to $172.7 billion. This was the biggest one-month jump in exports since March 1994.

Trade was a slight drag on first-quarter growth after adding over 3 percentage points to fourth-quarter growth.

The March data also shows continued revival in world trade activity that came to a standstill during the financial crisis in late 2008 and early 2009 and has been slowly improving over the past two years.

U.S. exports to Canada were the highest on record while imports from Canada were the highest since September 2008.

March U.S. exports to the European Union were the highest since June 2008 while imports from the region were the highest since July of that year.

In another good sign, U.S. exports to South and Central America hit a record in March.

March imports from Japan were the highest since July 2008. The earthquake and tsunami struck Japan on March 11 so the April trade data may more clearly show the impact of the disasters on bilateral trade flows.

In March, the increase in exports was broad-based and was led by record exports of agricultural products and industrial supplies. The gain came despite a decline in civilian aircraft exports.

The rise in imports in March was led by oil but also included record imports of food goods. Imports of consumer goods declined.

Some of the pick-up in imports could be attributed to higher prices. The dollar has been weak in recent months which tend to boost the cost of imported goods. In addition, the price of imported oil has sky-rocketed due to political turmoil in the Middle East and North Africa.

Real — that is, inflation-adjusted — imports of goods rose 3.7% in March, while real exports of goods surged 4.8%.

Imports of petroleum increased by $6.5 billion, to $27.7 billion, in March. The average price of imported oil jumped by $6.59 to $93.76 a barrel, the highest since September 2008.

The U.S. imported 9.5 million barrels a day in March, up from 8.7 million in the prior month. 

Hence, it can be concluded that even after a good recovery in the Economic Health all around the Globe, still the economies are having tough time in tackling the other factors like, rising Dollar, rising Crude Oil Prices, etc.