Due to a record-breaking gain in exports offset by soaring imports, the U.S. trade deficit worsened in February for the second consecutive month, raising the possibility that trade may hinder economic growth in the first quarter.
The Bureau of Economic Analysis of the Commerce Department said on Thursday that the trade deficit rose 1.9% to $68.9 billion. A minor revision to the January data revealed that the trade deficit increased to $67.6 billion, rather than the $67.4 billion that had been previously reported.
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In February, the goods trade deficit rose 1.2% to $87.0 billion after accounting for inflation.
After remaining neutral for the previous two quarters, trade increased by 0.25 percentage points to the economy’s 3.4% annualized growth rate in the fourth quarter. Right now, growth projections for the first quarter are as high as 2.8%.
Exports of goods increased by 2.9% to $176.7 billion. Crude oil exports, along with other industrial inputs and minerals, have increased. A boost in civilian aircraft led to a $1.5 billion gain in capital goods exports, reaching a record high of $53.0 billion.
However, motor vehicle, engine, and part exports dropped by $1.3 billion. Travel and transportation contributed $0.8 billion of the $86.4 billion record high in service exports.
In February, imports increased 2.2% to $331.9 billion, the most since October 2022. Imports of goods increased 1.8% to $268.1 billion. Imports of food, consumer products, and automobiles, parts, and engines all gained momentum.
