The U.S.’s trade deficit widened 4.8 percent to a record $71.1 billion in February, the Commerce Department said Wednesday.
Economists had forecast a trade gap of $70.4 billion. The January gap was revised down from $68.2 billion to $67.8 billion.
Both imports and exports fell in the month but the pace of the decline of exports was much swifter, enlarging the deficit. Imports fell seven-tenths of a percentage point but remain near record highs. Exports fell 2.6 percent.
The trade in goods deficit rose by $2.8 billion to $88 billion. The services surplus shrank $500,000 million to $16.9 billion.
U.S. exports have been hurt by the return off lockdowns and slumping economies across the globe, particularly in Europe. American spending has been bolstered by the strength of the U.S. economy, enhanced unemployment benefits, and stimulus payments—and a large portion of that spending is leaking out to foreign producers through imports.
The record-high trade deficit means a large share of income earned by Americans is being converted to the incomes of foreigners. That reduces the incomes of U.S. households and subtracts from gross domestic product.
The record-high trade deficits are expected to continue for the near term as the U.S. economy continues to grow faster than the economies of our trading partners. Economists predict that the U.S. economy will grow by 6 percent or more this year.
Year-to-date, the goods and services deficit is up $56.5 billion, or 68.6 percent, from the same period in 2020. On a year-to-date basis, exports decreased $36.2 billion or 8.7 percent. Imports increased $20.3 billion or 4.1 percent. The comparisons to last year include the beginning of the pandemic, which weighed heavily on international trade.
Imports of motor vehicles and parts fell $3.4 billion, including a $1.8 billion decline in passenger cars. Production of autos has been hurt around the world due to a shortage of semiconductors. Exports of vehicles and parts fell by $700,000 million.
Imports of consumer goods decreased by $2.7 billion. Exports of consumer goods fell by $9oo million.
Imports of industrial supplies and materials increased by $3.5 billion. Imports of oil rose by $1 billion.
The deficit with China increased by $3.1 billion to $30.3 billion in February. Exports decreased by $4.5 billion to $10.4 billion and imports decreased by $1.5 billion to $40.6 billion.
Exports of U.S. services, which typically run in surplus and slightly offset the long-running deficit in goods, have fallen during the pandemic, in large part because of a decline in tourism. Travel services, for example, fell by $100 million in February.