imageEconomic Indicators9 hours ago (Apr 02, 2020 10:10AM ET)

By Lucia Mutikani

WASHINGTON (Reuters) – The U.S. trade deficit dropped to near a 3-1/2-year low in February as the coronavirus pandemic pushed imports from China to their lowest level since 2009.

The Commerce Department said on Thursday the trade deficit fell 12.2% to $39.9 billion, the lowest level since September 2016. The percentage decline was the largest since March 2018.

Data for January was revised slightly to show the trade gap tightening to $45.5 billion instead of $45.3 billion as previously reported. Economists polled by Reuters had forecast the trade gap would decrease to $40.0 billion in February.

When adjusted for inflation, the goods trade deficit tumbled $9.0 billion to $69.0 billion in February. That was the lowest since February 2015. While the smaller so-called real trade deficit is a positive in the calculation of gross domestic product, declining imports means less inventory accumulation, which could offset the contribution to GDP.

The economy is, however, believed to have contracted in the first quarter as strict measures by states and local governments to control the spread of the coronavirus from mid-March brought the country to a sudden halt, triggering a wave of layoffs. That would be the first quarterly contraction since early 2014.

Economists believe the economy is already in recession.

The National Bureau of Economic Research, the private research institute regarded as the arbiter of U.S. recessions, does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries.

Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months.

The politically sensitive goods trade deficit with China dropped to $16.0 billion, the lowest since March 2009. Imports from China in February were the lowest since May 2009. Exports to China were the fewest since June 2010.

In February, goods imports fell 2.4% to $198.4 billion. That was the lowest since October 2017, and reflected decreases in imports of capital goods, industrial supplies and materials, consumer goods.

Goods exports rose 0.7% to $137.2 billion in February.

U.S. trade deficit near three-and-a-half-year low as Chinese imports tumble

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.