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The numbers: The U.S. posted a near-record $89.2 billion trade deficit in February, reflecting an ongoing surge in imports and ramped-up efforts to offload foreign goods at congested West Coast ports.
The trade gap fell a slight 0.1% from an all-time high in January. Economists polled by The Wall Street Journal had forecast a $88.5 billion trade gap.
Imports rose 1.3% in February to a record $317.8 billion. Exports climbed 1.8% to $228.6 billion — also a record.
Last year, the U.S. posted the highest trade deficit ever. The U.S. economy has recovered faster than other countries and that’s allowed Americans to spend more on imported goods. Exports have rebounded more slowly.
Big picture: The U.S. economy is likely to show a paltry increase in growth in the first quarter — at least officially — and the record trade deficit is a big reason why. High deficits subtract from gross domestic product, the official scorecard for the economy.
Yet by most other measures, the U.S. is still expanding at a fairly strong pace. Consumer spending, the main driver of the economy, has accelerated and most businesses are hiring.
The U.S. has run large deficits for years without much effect on the broader economy.
Key details: U.S. imports topped $300 billion in November for the first time ever and have now exceeded that benchmark for four months in a row.
The U.S. bought less foreign oil in February, but higher oil prices drove up the value of petroleum imports . The U.S. also imported more chemicals and capital supplies.
The amount of exports rebounded from a decline in January, led by increases in drugs such as coronavirus vaccines.
The U.S. also exported more oil and coal, a response to the Russian war on Ukraine and need kin Europe and elsewhere for alternative sources of fossil fuels.
The surge in the trade deficit since last fall partly reflects U.S. ports trying to clear a backlog of goods that have piled up in nearby warehouses or on ships waiting to unload.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
DJIA,
were set to open lower in Tuesday trades. Stocks have rebounded in the past few weeks after a recent “correction” that sent shares sharply lower.
