The U.S. Department of Commerce reported on Thursday that the trade deficit widened from -$38.5 billion in December to -$44.8 billion in January, a 16.4 percent increase. Total January exports were $184.5 billion, a 1.1 percent month-over-month decline, while imports increased 1.8 percent to $228.9 billion.
The results are worse than the consensus estimate that expected the deficit to widen to $43.0 billion, but not worth invoking a red alert over. The unexpected worsening of the trade gap was led by the petroleum deficit, which grew from $18.6 billion to $24.3 billion. On the other side of the fence, the services surplus edged down slightly, from $17.9 billion to $17.3 billion.
January’s figures indicated that trade will be an anchor for first-quarter GDP growth. This is a contrast to December’s trade figures, which were a factor in the upward revision in fourth-quarter GDP estimates.
January’s results show that the U.S. ran a trade surplus of $2.7 billion with Hong Kong, $1.2 billion with Australia, and $1.1 billion with Singapore, the highest among all trade partners. Each of these surpluses shrank from December to January, with the U.S. surplus with Hong Kong falling 32.5 percent.
Meanwhile, the U.S. trade gap with China increased 13.5 percent to $27.8 billion. The U.S. deficit with the European Union shrank 0.1 points to $8.6 billion.
The December to January increase in imports was led by industrial supplies and materials imports, which came in at $4.0 billion.
The January report did include a nugget of good news; the December trade gap was revised even lower, from $38.5 to $38.1 billion.
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