Trade Deficit Improves 11% For March

The U.S. international trade deficit improved for March, according to a Commerce Department report (link opens in PDF) released today. The total deficit fell 11%, to $38.8 billion, more than double analysts' expectations of a $42.4 billion March deficit. This news also marks the second straight month of improvements, after February's deficit decrease put 2013 on track for an improved trade balance.

Deficits improve in two ways: (1) exports increase more than imports, or (2) imports decrease more than exports. The first scenario is generally favored over the second, as it more directly shows signs of an internally strengthening economy. March's results show the second, where a 2.8% drop in imports proved more than enough to offset export's 0.9% slump.

Source: census.gov 

While the services surplus rose $0.2 billion to reach $17.3 billion, the goods deficit's $4.6 billion decrease accounted for all of March's improvements. Foods, feeds, and beverages exports fell $1.1 billion, but a $3.4 billion slump in consumer goods imports alone more than offset a total goods exports decrease of $1.8 billion.

The U.S. currently enjoys its largest trade surplus for goods with Hong Kong ($3.2 billion), while a $17.9 billion China deficit is nearly double the U.S.' $8.8 billion trade deficit with the European Union.


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