The Strategist

Capital Economics: US trade deficit grows in February

04/06/2018 - 11:01

The US trade deficit in February was a record high, amounting to $ 57.6 billion, reports the Bureau of Economic Analysis (a statistical agency of the US Department of Commerce). In February, the country imported goods by $ 77 billion more than it exported. On the contrary, a surplus of $ 19.5 billion has been preserved. The deficit has been growing for six months now and is now the highest since October 2008. Experts at Capital Economics, however, note that the February figure, at least in part, is associated with a one-time large payment of royalties for the rights to broadcast the Winter Olympic Games.

kalhh via pixabay
kalhh via pixabay
Monthly volumes of exports and imports also turned out to be record high. The total US exports for the month increased by 1.7%, to $ 204.4 billion: a decrease in the supply of consumer goods abroad was offset by an increase in the export of cars and equipment. The growth of imports was comparable - by 1.7%, to $ 262 billion, mainly due to the increase in the supply of capital goods, and also because of the $ 1 billion paid for the rights to broadcast the Games. In general, for the first quarter of 2018, net exports could again turn out to be negative, amounting to 2-2.5% of GDP, Capital Economics forecasts. They point out that the rate of acceleration of imports, supported by growing consumer demand, is beginning to slow down (the increase was 14% in the fourth quarter of 2017).

The deficit of trade in goods with China (to a record level of which the White House refers when approving protective measures) fell 19% in February to $ 29.3 billion (the total trade surplus of the PRC with all countries was $ 33.7 billion). However, this may be the result of a long weekend in China related to the celebration of the Chinese New Year, Capital Economics noted. With the exception of such factors, the imbalance in trade between the two countries has only increased over the past quarters (see chart). Last year, the deficit in trade in goods was a record high, amounting to $ 375.2 billion against $ 347 billion in 2016.

The US deficit in trade with all countries amounted to $ 810 billion, the surplus in trade in services - $ 244 billion (total figure - $ 566 billion). Let's remind, the Ministry of Trade of the USA and the National Council on Trade promise to get rid of such a high deficit in trade within one or two years.


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