Wall Street analysts had expected weak consumer demand and softer oil prices to trim the monthly trade gap by only $1 billion, from the record set in January. The Commerce Department revised January’s shortfall slightly higher to $68.6 billion.
The February trade gap was still the third highest on record, suggesting the annual trade deficit could surpass last year’s record of $723.6 billion unless it begins shrinking much more rapidly in the coming months.
US imports fell 2.3 per cent in February to $178.7 billion, the largest month-to-month decline since March 2005, but still the second highest on record after January. Many analysts had expected imports to retreat after surging in the first month of 2006.
The politically sensitive trade deficit with China narrowed significantly in February to $13.8 billion, the lowest level since March 2005.
The smaller trade gap, which reflected a 16.2 per cent drop in imports and a 17.0 per cent rise in exports, comes just a week before President George W. Bush is expected to press Chinese President Hu Jintao for action on a number of trade irritants, such as Beijing’s currency policy, at a White House meeting. February exports to China, at $4.1 billion, were the second highest on record.
US overall exports fell 1.2 per cent in February to $113 billion, but like imports were second only to the record set in January. Exports of capital goods, such as computer accessories and industrial machines, and industrial supplies and materials were also the second highest on record.
Average oil import prices jumped nearly $2 per barrel in February to $53.72, the Commerce Department said. However, the value of crude oil imports declined slightly to $15.6 billion because of lower shipment volumes.
Meanwhile, US exports to members of the Organization of Petroleum Exporting Countries reached $3.3 billion, the second highest on record. The record was $3.4 billion in December 1997.
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