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 The Commerce Department said on Tuesday the trade gap fell 3.6
percent to $40.4 billion. February's deficit was revised to $41.9
billion from a previously reported $42.3 billion.
Economists polled by Reuters had forecast the trade deficit falling
to $40.3 billion in March. When adjusted for inflation, the trade
deficit dipped to $49.4 billion from $49.8 billion in February.
March's shortfall, however, was a little bigger than what the
government had assumed in its advance first-quarter gross domestic
product estimate last week, suggesting the economy contracted in the
first three months of the year.
Trade subtracted 0.83 percentage point from GDP growth in the first
quarter, helping to hold down the economy to a 0.1 percent annual
growth rate.
The trade report was the latest indication that the government will
likely lower its growth estimate to show a contraction when it
publishes revisions later this month.
Data last week showed spending on construction projects and factory
inventories in March were not as strong as the government had
assumed. Those reports had suggested the economy contracted at about
a 0.4 percent rate in the first quarter, according to economists.
The three-month moving average of the trade deficit, which irons out
month-to-month volatility, increased to $40.5 billion in the three
months through March from $40.0 billion in the prior three-month
period.
Exports increased 2.1 percent to $193.9 billion in March, the
highest level since November. The rise in exports fit in with other
data suggesting momentum in the economy at the end of the first
quarter.
Exports of capital goods, industrial supplies and materials,
automobiles increased in March. Exports of services hit a record
high, while those of non-petroleum goods were also the highest on
record. Exports to Canada, South Korea and Germany touched record
highs in March.
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Imports rose 1.1 percent to $234.3 billion in March, the highest
level in two years, in part reflecting a rise in the price of
petroleum. A slow pace of restocking by businesses as they worked
through an inventory glut accumulated in the second half of 2013 has
restrained imports in recent months.
In March, food imports hit a record high and non-petroleum imports
were the highest on record.
Goods and services sold to China increased 9.6 percent, while
imports from that country advanced 1.6 percent.
That left the politically sensitive U.S. trade deficit with the
world's second-largest economy at $20.4 billion in March, compared
to $20.9 billion in February.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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