U.S. Outlook: Trade balance improves, but it’s not a good thing
The U.S. trade deficit narrowed to $40.4 billion in March, beating economists’ consensus expectations.
For more details about what’s going on, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on May 6.Key observations:
- The trade gap shrank 13.9% month-over-month and was the smallest since February 2015.
- Last month the biggest import declines came from consumer goods and food & beverage — either reflecting waning consumer demand or declining prices, or both.
- U.S. exports have been declining now for 15 consecutive months, while imports were down a more substantial 9.1% from March 2015.
- Continued weak growth abroad and relatively strong U.S. dollar nearly ensures the U.S. trade deficit will remain a net drag on U.S. GDP growth this year.