US trade deficit grows to 5-month high

The US trade deficit unexpectedly widened to the highest level in five months in February as demand for U.S. exports fell while imports increased slightly, the government reported Thursday. The Commerce Department said the trade deficit increased 7.7 percent to $42.3 billion, the biggest gap since last September. Economists had expected the deficit to decline modestly. US exports fell 1.1 percent to $190.4 billion in February, the lowest level since September. Sales of commercial aircraft, computers, and agricultural goods declined, and energy exports declined 10.2 percent to $11.1 billion. Imports rose 0.4 percent to $232.7 billion, reflecting higher demand for autos and clothing, which offset a drop in petroleum imports, which fell 2 percent to $31 billion. Crude-oil imports fell to $19.5 billion, the lowest level in more than three years. For the first two months of this year, the trade deficit is running 4.5 percent below the same period in 2013. Many economists expect the deficit will continue to narrow this year as exports, helped by an energy production boom in the United States, grow faster than imports. The domestic energy boom has reduced the U.S. dependence on foreign oil. U.S. petroleum exports rose to a record high of $137.2 billion last year, up 11 percent from 2012. Energy imports fell 10.9 percent to $369.4 billion as domestic production replaced some imports. The politically sensitive trade deficit with China plunged 25.1 percent in February to $20.9 billion, but the 19.5 percent drop in imports was attributed to the Chinese new year holiday. Economists still expect the U.S. deficit with China—the biggest with any country—to surpass the record set in 2013.