economy and politics

US trade deficit increases due to inflation and greater demand for products

US trade deficit increases due to inflation and greater demand for products

Consumer goods imports rose $4.1 billion, driven by increases in mobile phones and other household items, as well as pharmaceutical preparations, toys, games, and sporting goods.

Service imports increased $100m to $57.9bn, driven mainly by travel. Transportation services declined.

The December data was revised to show the trade gap stood at $67.2bn, instead of the previously reported $67.4bn. Economists polled by Reuters had forecast a trade deficit widening to $68.9bn.

Exports soar

Exports shot up 3.4% to $257.5 billion. Exports of goods rose 6% to $177.8 billion.

Exports of capital goods were the highest on record, as were those of consumer goods, motor vehicles, parts and engines.

But service exports fell $1.6bn to $79.7bn, dragged down by declines in travel and transportation. Exports of other business services increased.

Adjusted for inflation, the merchandise trade deficit widened 3.6% to $101.8bn in January. A lower trade deficit was one of the factors contributing to the economy’s annual growth rate of 2.7% in the fourth quarter.



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