WASHINGTON – The biggest gain in U.S. exports in nine months helped narrow the trade deficit in March, pointing to a revival of global demand that will help the world’s largest economy strengthen.
The gap shrank by 3.6 percent to $40.4 billion from the prior month’s $41.9 billion, Commerce Department figures showed Tuesday in Washington. The median forecast in a Bloomberg survey of 66 economists called for a reduction to $40 billion. Sales to foreign customers climbed 2.1 percent on growing demand for aircraft, autos and fuels.
A slowdown in trade helped depress economic growth in the first quarter, which was already held back by harsh winter weather that trimmed business investment. The March improvement adds to a spate of data showing the world’s largest economy was gaining steam heading into the second quarter.
“Exports rebounded after a few weaker months, and that’s good to see,” said Paul Edelstein, director of financial economics at IHS Global Insight Inc. in Lexington, Mass., who projected the gap would narrow to $40.5 billion. “Imports were also up, and that’s a good sign because it suggests that business and consumer spending are back on track. In general, this is a pretty good report.’
Stocks fell as lower profit from American International Group Inc. dragged down financial shares. The Standard & Poor’s 500 Index declined 0.4 percent to 1,876.84 at 9:45 a.m. in New York.
Bloomberg survey estimates for the trade gap ranged from deficits of $43 billion to $38 billion. The Commerce Department initially reported a $42.3 billion shortfall for January.
Exports increased to $193.9 billion from $190 billion in February paced by record demand from Canada, South Korea and the countries in the CAFTA-DR trade zone, which includes Central America and the Dominican Republic. Shipments to Germany were the strongest since October 2008. Excluding petroleum, exports were at an all-time high in March.