US trade gap narrows as imports and exports fall

Imports and Exports | | MIC Customs Solutions |

The US goods trade deficit narrowed sharply to a one-year low in March, with imports and exports both falling.

US import and export figures both declined during March 2016, narrowing the country's goods trade deficit during the month.

The latest US government data has shown that exports of American-made products fell to $116.7 billion (€102.83 billion), the lowest monthly total since 2011. Meanwhile, imports dropped to $173.6 billion, the weakest performance since 2010.

Because the fall in imports outpaced the decline in exports, the country's goods trade gap tumbled 10.3 per cent to $56.90 billion, the smallest deficit recorded since February 2015.

The deceleration of international trading for US businesses during the month was a cause for concern, but economists nevertheless responded positively to the shrinking trade deficit, as this could be a positive omen for the broader economy.

Paul Ashworth, chief US economist at Capital Economics in Toronto, said the data "suggests that first-quarter GDP growth will be much stronger than we previously believed", adding that growth is now estimated at 1.4 percent annualised, compared to the previous forecast of 0.8 per cent.