US trade deficit widens for a third month to $70.5 billion

The US trade deficit widened for a third-straight month in February as the value of exports fell more than imports.

The gap in goods and services trade grew 2.7% to $70.5 billion, the widest in four months, Commerce Department data showed Wednesday. The figures aren’t adjusted for inflation. The median estimate in a Bloomberg survey of economists called for a $68.8 billion gap.

The value of imports decreased 1.5%, while exports fell 2.7% — both reflecting weaker merchandise trade.

On an inflation-adjusted basis, the goods-trade deficit increased to $104.6 billion, also the widest in four months. US exports of consumer goods, motor vehicles and capital equipment all declined in February.

While the merchandise trade deficit widened, the US services surplus increased. Travel exports — or spending by visitors to the US — increased to a three-year high. Travel imports, a measure of Americans traveling abroad, were little changed. 

Imports of consumer goods fell for the first time in three months on an inflation-adjusted basis. Motor vehicle imports also declined.

The drop in both exports and imports highlights softening demand, particularly for goods, at home and abroad amid an ongoing shift to spending on services as well as an uncertain economic outlook. 

Prior to Wednesday’s report, the Federal Reserve Bank of Atlanta’s GDPNow estimated net exports would add 0.44 percentage point to gross domestic product in the first quarter.

The US goods-trade deficit with China, on an adjusted basis, widened to $25.2 billion, the most in four months.