The trade deficit in the United States expanded by 22% to $109.8 billion in March, as oil prices and imported goods rose due to soaring inflation, according to figures released this week from the Census Bureau and the Bureau of Economic Analysis.
The trade deficit for February was revised upward to $89.8 billion, which was the previous record high. The figure in January was $89.23, which was a new high at the time.
According to Econoday, economists had predicted the deficit would reach $106.5 billion this year.
In March, imports increased 10.3 percent to a new all-time high of $351.5 billion. The figures are not corrected for inflation, so much of the jump is likely attributable to higher costs rather than just additional imports. In March, oil prices rose even more rapidly adding to the increase in nominal import growth.
Exports rose 5.6 percent to $241.7 billion, also a record high.
In real terms, however, U.S. imports have increased significantly as inflationary forces have constricted the economy in a vice grip. Last fall, strong demand from American consumers, who were flush with savings from curtailed spending during the lockdowns and stimulus checks, pushed imports to an all-time high of more than $300 billion. The month of March was the fifth in a row above $300 billion.
Because the economies of countries that buy United States goods and services have recovered more slowly than the United States, exports have grown more slowly than imports. As a result, much of the U.S. federal government’s deficit spending, which is being supported by record levels of government debt issuance, is flowing as income to foreign producers. Exports produce a trade surplus, which deprives the government of tax revenue and lowers household income. The hole in people’s earnings becomes larger, requiring either more private sector debt or deficit spending to fill the gap. GDP was decreased by imports, which was one of the main reasons for the first-quarter contraction.
Imports have risen as a result of the backlog of goods that had been stranded on ships at U.S. ports, notably those in Los Angeles, being cleared. Metal shapes, automobiles, computers, clothes, toys, and furniture were among the imports that increased in March. In March, petroleum products exports (including crude oil and fuel oil) rose significantly.