The trade deficit increased 2.7% to $70.5 billion, the Commerce Department said on Wednesday. Data for January was revised to show the trade gap widening to $68.7 billion instead of $68.3 billion as previously reported. Economists polled by Reuters had forecast the trade deficit rising to $69 billion.
Exports fell 2.7% to $251.2 billion, likely reflect slowing global demand as well as the U.S. dollar's past appreciation, which is making U.S.-made goods less competitive on international markets.
Goods exports plunged 4.8% to $169.2 billion, weighed down by declines in natural gas and nonmonetary gold. Exports of motor vehicles, parts and engines fell $1.9 billion, while those of consumer goods decreased $1.4 billion. There were also decreases in exports of capital goods. But exports of services increased $1.7 billion to $82.0 billion, boosted by travel.
Imports fell 1.5% to $321.7 billion, with goods declining 2.2% to $262.2 billion. Domestic demand is slowing amid higher borrowing costs aimed at taming inflation, which has seen businesses less enthusiastic about boosting inventory of goods.
Consumer goods imports fell $3.7 billion, mostly reflecting decreases in cell phones and other household goods, pharmaceutical preparations as well as cotton apparel and household goods. Imports of motor vehicles, parts and engines fell $2.9 billion. But imports of services increased $0.8 billion to $59.5 billion, lifted by transport.
Adjusting for inflation, the goods trade deficit widened 2.7% to $104.6 billion. A smaller trade deficit was one of the contributors to the economy's 2.6% annualized growth rate in the fourth quarter. As of Wednesday morning, the Atlanta Federal Reserve was forecasting first-quarter gross domestic product increasing at a 1.7% pace.
(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
