US trade deficit falls to eight-month low in Feb

The February trade numbers will not reflect difficulties suffered by Boeing, which suspended deliveries of its top-selling B-737 Max aircraft, following fatal crashes in Ethiopia and Indonesia in recent months.
The February trade numbers will not reflect difficulties suffered by Boeing, which suspended deliveries of its top-selling B-737 Max aircraft, following fatal crashes in Ethiopia and Indonesia in recent months.PHOTO: BLOOMBERG

WASHINGTON • The United States trade deficit in February fell to its lowest level in eight months, thanks in part to rising aircraft and auto exports, according to government data released yesterday.

The trade deficit - which fell for the second month in a row after hitting a 10-year high in December - was also helped by record exports of US services, according to the Commerce Department.

At US$70 billion (S$95 billion) for the month, US services exports were the highest on record, helped by a US$200 million increase in exported transport services.

Meanwhile, crude oil imports fell to their lowest volume in nearly 27 years, according to the report.

The narrowing trade gap could support gross domestic product growth in the first quarter and offers relief from what had been a frustrating data point for President Donald Trump since his aggressive tariff strategy was aimed at reducing the deficit.

Mr Trump views the trade deficit as a job killer and he launched a multi-front trade offensive with all major US trading partners.

The trade gap in the latest month fell 3.4 per cent to US$49.4 billion, seasonally adjusted, well below the US$54 billion that economists had been expecting.

The result, which is subject to revision, put the first two months of the year 7.6 per cent below the same period last year.

Total exports of US-made goods rose US$2.1 billion to nearly US$140 billion for the month, with the volatile civilian aircraft exports up US$2.2 billion and auto exports up US$600 million.

In a particularly positive point for Mr Trump, the goods deficit with China fell US$3.1 billion to US$30.1 billion compared with January, helped in part by a recovery for the month in soya bean exports. Total exports of the crop rose US$190 million to US$1.4 billion.

Meanwhile, the deficit in goods alone with Japan, which just opened talks on a new trade agreement with the US, jumped US$1.3 billion to US$6.7 billion due to a slump in US exports.

The goods deficit with the EU - which is planning to open trade talks with Washington - fell 5.3 per cent to US$12.4 billion.

Total exports of US-made goods rose US$2.1 billion to nearly US$140 billion for the month, with the volatile civilian aircraft exports up US$2.2 billion and auto exports up US$600 million.

The February numbers, however, will not reflect difficulties suffered by Boeing, which last month suspended deliveries of its top-selling B-737 Max aircraft following fatal crashes in Ethiopia and Indonesia in recent months.

US imports were largely stable for the month, with a decrease in imports of industrial supplies partly offsetting a US$2.1 billion gain in imports of mobile phones and other household consumer goods.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on April 18, 2019, with the headline 'US trade deficit falls to eight-month low in Feb'. Print Edition | Subscribe