U.S. Trade Deficit Widens In February As Exports Slump More Than Imports

(RTTNews) - With exports slumping by more than imports, the Commerce Department released a report on Wednesday showing the U.S. trade deficit widened more than expected in the month of February.

The Commerce Department said the trade deficit increased to $70.5 billion in February from a revised $68.7 billion in January.

Economists had expected the trade deficit to rise to $69.0 billion from the $68.3 billion originally reported for the previous month.

The bigger than expected trade deficit partly reflected a steep drop in the value of exports, which plunged by 2.7 percent to $251.2 billion in February after spiking by 3.6 percent to $258.0 billion in January.

The report showed significant decreases in exports of pharmaceutical preparations, natural gas and passenger cars.

Meanwhile, the Commerce Department said the value of imports also tumbled by 1.5 percent to $321.7 billion in February after surging by 3.3 percent to $326.7 billion in January.

Sharp declines in imports of consumer goods and automotive vehicles, parts and engines more than offset an uptick in imports of services.

"The sharp declines in both exports and imports in February add to the signs that economic growth is faltering," said Andrew Hunter, Deputy Chief U.S. Economist at Capital Economics.

He added, "Although strong gains in January mean that both are still likely to have risen over the first quarter as a whole, we think further falls are likely in the second quarter."

The report also said the goods deficit widened to $93.0 billion in February from $90.3 billion in January, while the services surplus rose to $22.4 billion from $21.6 billion.