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February US trade deficit increases to $39.7 billion
The wider deficit was a sign of a rebounding US economy. Economists expect the trade deficit to rise this year but hope that expanding exports will continue to lift the fortunes of American manufacturing companies.
The Commerce Department reported Tuesday that the deficit for February increased 7.4 percent to $39.7 billion. That was larger than the $38.5 billion deficit economists had expected. Exports edged up 0.2 percent while imports jumped 1.7 percent.
The politically sensitive deficit with China fell to $16.5 billion in February, the lowest level in 11 months, but was still the biggest trade imbalance the United States has with any country. Pressure has been building in Congress for the Obama administration to take a tougher line with China and impose trade sanctions on Chinese products unless Beijing allows its currency to rise in value against the dollar which would boost the competitiveness of American products. Congressional critics believe China’s unfair currency manipulation is costing American jobs at a time when the country has lost 8.2 million jobs because of a deep recession.
The February deficit was the highest since December and followed a revised $36.95 billion imbalance in January. In the first two months of this year, the deficit is running at an annual rate of $459.9 billion, up 21.5 percent from the $378.6 billion imbalance recorded in 2009. That had been the smallest trade gap in eight years, reflecting the severe US recession that depressed demand for imports.
While imports are expected to rise this year, analysts believe exports will grow as well, reflecting a rebound in the global economy and a weaker dollar, which helps American producers by making their products cheaper in overseas markets.
For February, the small 0.2 percent rise in exports of goods and services pushed the total to $143.2 billion, the highest level since Octobrer 2008. Gains were seen in exports of autos and auto parts, industrial engines, semiconductors and civilian aircraft engines.
Imports rose a larger 1.7 percent to $182.9 billion as imports of consumer goods rose to the highest level since October 2008.
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