The US trade deficit unexpectedly narrowed in March to its lowest point in six months, as consumers cut back on purchases of imports, and businesses and farmers increased their sales in foreign markets.
The monthly trade deficit dropped by 9 percent, to US$55 billion, the Commerce Department reported Wednesday, a surprise after most analysts predicted US$61 billion.
"This is good news," said Robert Scott, economist at the Economic Policy Institute. "What we're beginning to see over the last three months is a leveling-out of the trade deficit. But the numbers have been jumping all over the place, so you can't expect it to last."
Despite this improved figure, the trade deficit was growing at a faster rate than last year, which set an annual record of US$617.08 billion.
The deficit dropped from US$60.6 billion in February, despite a US$600 million increase in petroleum imports. Rising oil prices and the weakening dollar are expected to play competing roles in the volatile trade figures this year.
Few analysts, however, were willing to credit the weakened dollar for the improved trade picture.
"If we were reaping the benefit from a weak dollar, we would be seeing a much stronger growth in our export market," said Robert DiClemente, chief US economist at Citigroup.
Instead, while exports rose by US$1.5 billion, including sales of airplanes, food and a range of capital goods, the biggest reason for the drop in the monthly trade deficit was the US$4 billion decline in imports.
The huge drop in the purchase of imported consumer goods, from automobiles to clothing, confounded many analysts, who suggested this may be a result of full inventories and, possibly, a stagnation in wages.
Part of the surprise was the drop in the deficit with China.
Analysts had expected the flood of imported clothing and textiles from China to remain strong in March, but the imports dropped by 21 percent from February. Even with that decline, Chinese textile imports for the first three months of this year are up 54 percent compared with the period last year.
The US textile industry has persuaded the administration to investigate imposing temporary quotas on the import of Chinese textiles, saying the surge of imports since the lifting of global quotas unduly threatens manufacturing plants and jobs in the US.
Critics of the administration's trade policies have blamed China for much of the record trade deficit and have called on the administration to be more aggressive in enforcing trade laws.
The Chamber of Commerce estimates that the US loses US$200 billion a year from pirating and counterfeiting caused by China's weak protection of intellectual-property rights.
Lawmakers in Congress have introduced legislation to levy tariffs as high as 27 percent against Chinese goods to pressure China to revalue its currency.
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