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August 3, 2020

US Trade Deficit Widens in January, Exports Under Pressure From Strong Dollar

The US trade deficit widened 2.2 percent in January from a month ago as the country’s exports remained under pressure from a strong dollar and imports fell in part due to decreased industrial supplies and materials.

According to the latest trade data issued by the Commerce Department, the trade gap in January was recorded at seasonally adjusted $45.68 billion from $44.7 billion in December.

Exports fell 2.1 percent or $3. Billion from the previous month and stood at $176.5 billion. Imports were $222 billion, $2.8 billion less than the December imports.

“The January increase in the goods and services deficit reflected an increase in the goods deficit of $1.1 billion to $63.7 billion and an increase in the   services surplus of $0.1 billion to $18.0 billion,” according to the data.

Year-over-year, the goods and services deficit increased $2.1 billion, or 4.8 percent, when compared with the deficit in the same month of the last year.  Exports decreased $12.5 billion or 6.6 percent. Imports decreased $10.5 billion or 4.5 percent.

Shipments of capital goods, industrial supplies, foods and consumer goods showed decline in January. The automotive market did well in the month as the US exports and imports of car were higher than that in December.

According to analysts, strong dollar and low oil prices are causing trade shifts. Exports to Canada, China and South and Central American fell as consumer found American products expensive to buy due to strong dollars.

Trade deficit with China increased $1.4 billion to $31.1 billion in January. Exports increased less than $0.1 billion to $8.6 billion and imports increased $1.5 billion to $39.8 billion.

Imports of goods decreased $2.9 billion to $180.6 billion in January.  Industrial supplies and materials decreased $2.1 billion, while import of Crude oil decreased $1.8 billion. Capital goods decreased $1.2 billion.

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