US merchandise trade slumps to lowest in almost three years

U.S. exports and imports of goods slumped in March to the lowest level in almost three years as the coronavirus pandemic shut down economies across the world.

Goods exports fell 6.7% from the prior month—the sharpest decline since 2008—led by plunges in auto shipments and industrial supplies such as oil, according to Commerce Department data released Tuesday. Imports fell by 2.4% on autos and consumer goods. Combined, U.S. exports and imports were the lowest since May 2017.

The goods-trade deficit widened in March to $64.2 billion from $59.9 billion the prior month. The median forecast in a Bloomberg survey called for a $55 billion deficit.

The report also showed retail inventories rose 0.9% from the prior month, reflecting unsold motor vehicles and parts. Wholesale inventories dropped 1% on a decline in nondurable goods, potentially reflecting consumers stocking up on food and other groceries.

Analysts typically look to these numbers to adjust estimates for economic growth during the quarter. Such adjustments might take a backseat at the moment to the bigger story of coronavirus lockdowns likely ending the record-long U.S. expansion in the first quarter and delivering a historic contraction in the second quarter.