U.S. trade deficit widens slightly in January

Trade deficit of U.S. widened a bit in the month of January. It broadened to USD 56.6 billion, slightly higher than expectations. The advance report on the goods trade balance, released earlier in the month, had recorded a USD 2.1 billion widening of the goods trade deficit. But that number was upwardly revised, with the January nominal goods trade deficit now at USD 76.5 billion and explains the miss relative to our forecast. The incremental information in today’s report is the balance on services trade which was widely consistent with expectations.

Delving into details, January was subdued for both imports and exports. Total imports remained flat, after a series of solid gains in prior months. Goods imports fell modestly, driven by consumer goods and capital goods. But this was countered by a small rise in services imports. Exports dropped 1.7 sequentially, driven mainly by industrial supplies and capital goods. Overall, the goods trade balance continues to be in deficit, while the surplus in services trade held widely stable in January at USD 19.9 billion.

The January trade deficit was slightly wider than expected and implies lower net exports than was anticipated, noted Barclays in a research report.

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