US trade deficit narrowed to a three-tear low in February

The U.S. trade deficit shrank in February to the smallest in more than three years as imports declined more than exports ahead of the hit to global commerce from the expanding pandemic.

The overall gap in goods and services trade declined to $39.9 billion from a revised $45.5 billion in January, according to Commerce Department data released Thursday. The median estimate of economists surveyed by Bloomberg had called for a $40 billion shortfall.

Imports fell 2.5%, the most in nearly four years, to $247.5 billion, while exports dropped 0.4% to $207.5 billion. The goods-trade deficit with China shrank to $16 billion on an unadjusted basis, the narrowest since 2009, as most of the Asian nation was locked down during the virus battle.

The latest data show that foreign trade was already diminishing even before global supply chains faced unprecedented disruption in March. International trade flows were substantially impaired last month, with a gauge of new export business in the JPMorgan Global Manufacturing index falling at the fastest pace in almost 11 years.

The report showed that spending for travel, among the largest components of services exports, tumbled 7% from the prior month, the most since the aftermath of the September 2001 attacks, to $16.6 billion. The category includes business travel, including expenditures by short-term workers, and personal travel, including health- and education-related activity. It excludes air passenger services for travel between countries.