US trade deficit shrinks slightly in March

The US trade deficit saw a slight narrowing in March, with a decline in imports partially offset by a significant drop in exports, according to data released by the Commerce Department's Bureau of Economic Analysis on Thursday.

The trade deficit contracted by 0.1 per cent to $69.4 billion, compared to the revised figure of $69.5 billion for February, previously reported as $68.9 billion. Economists surveyed by Reuters had anticipated a deficit increase to $69.1 billion for March.

Trade, marked by a surge in imports, had a notable negative impact on gross domestic product (GDP) during the first quarter. The economy expanded at an annualized rate of 1.6 per cent last quarter, following a 3.4 per cent growth pace in the October-December period.

In March, imports saw a 1.6 per cent decline to $327.0 billion, with goods imports falling to $263.8 billion, led by decreases in motor vehicles and parts, as well as industrial supplies and materials, including crude oil. However, imports of consumer goods surged by $3.0 billion, driven by pharmaceutical preparations, while capital goods imports reached a record high. Service imports decreased by $1.1 billion to $63.2 billion, with transport and travel leading the decline.

On the export front, there was a notable 2.0 per cent drop to $257.6 billion in March. Goods exports plummeted by 2.9 per cent to $171.3 billion, attributed to declines in exports of capital goods, industrial supplies and materials, as well as foods, feeds, and beverages. Service exports also dipped slightly by $0.2 billion to $86.4 billion.

(With Reuters inputs)