The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, reported that the U.S. trade deficit shrank 11 percent sequentially in March to $38.8 billion. Total exports were $184.3 billion, down 0.9 percent on the month, while total imports were $223.1 billion, down 2.8 percent. Economists were expecting the deficit to shrink marginally to $42.4 billion.
March’s data suggests that both domestic demand for foreign goods and services and overseas demand for U.S. goods and services shrank. The improvement in the trade gap was driven by the non-petroleum goods deficit, which shrank 9.8 percent on the month to $34.8 billion. The petroleum deficit and the services surpluses both improved marginally.
The March trade data, although not tremendously exciting, could prove to be a positive catalyst to revised first-quarter GDP estimates. Chinese exports were likely soft due to the New Year holiday, and non-petroleum imports could increase dramatically on the month in April.
In March, the goods deficit decreased $4.6 billion from February to $56.1 billion, and the services surplus increased $0.2 billion from February to $17.3 billion. Exports of goods decreased $1.8 billion to $130.3 billion, and imports of goods decreased $6.4 billion to $186.5 billion. Exports of services increased $0.1 billion to $53.9 billion, and imports of services decreased $0.1 billion to $36.6 billion.