US trade deficit widens in January as imports accelerate

WASHINGTON: The US trade gap increased slightly in January as imports grew at a faster pace than exports and economic activity continued to pick up after the pandemic shutdowns, according to government data released Friday.

Imports of cars and consumer goods lead the way, including a $5 billion jump in pharmaceutical preparations compared to December, the Commerce Department reported.

American exports of goods and services increased to $192 billion while imports jumped $260 billion, increasing the trade deficit to $68.2 billion, which was more than economists had been expecting.

The deficit with China in goods alone narrowed slightly to $27.2 billion, while the gap with Mexico expanded to $11.9 billion, the data showed.

The dominant US services sector has yet to recover its strong pre-pandemic export position, and although the surplus expanded slightly, James Watson of Oxford Economics said that was “due to the weakness in imports, which remain near eight-year lows.” “Fiscally-stimulated US demand may propel total import volumes to recovery this quarter, but still-struggling global demand and travel restrictions will keep export volumes much further behind,” he said in an analysis.