The march expansion in the US trade gap was the largest in nearly two decades, suggesting that international commerce was a significant drag on economic growth to start the year.
The trade deficit widened by 43.1% to a seasonally adjusted $51.37 billion in march, the Commerce Department said tuesday. That was the largest monthly expansion in the trade gap since december 1996 and the largest deficit reading since october 2008.
Economists surveyed by The Wall Street Journal had forecast a trade deficit of $42.5 billion in march.
The expanding trade gap was driven by the largest increase in imports on record. That indicates that foreign goods flowed steadily into the US in march after months of being stalled by a labor dispute at West Coast ports. Imports rose 7.7% to $239.21 billion in march.
Meanwhile, overseas demand for US goods and services remained modest. Exports increased 0.9% from february to $187.84 billion.
The february trade deficit was revised to $35.89 billion from an initially reported $35.44 billion. That month’s reading was the narrowest since october 2009.
The three-month moving average gap was $43.31 billion in march, only slightly wider than the $41.17 billion average deficit a year earlier.
The big swing coincides with a late february agreement resolving the dispute at West Coast ports. With ports returning to normal operations several categories of imports touched record highs in march, including capital goods, consumer goods, and foods, feeds and beverages.
Surging shipments of those products could also suggest that a stronger US dollar is support domestic demand for foreign goods.
The dollar has gained against most other currencies in recent months. A stronger dollar makes foreign goods and services relatively more affordable, though it also makes US exports more expensive in overseas markets.
In addition, slowing economies in parts of Europe and Asia have lessened demand for US goods and services.
US exports rose slightly from february, but are down from a year earlier. Exports of consumer goods, including drugs and jewelry fell in march, US firms did increase shipments of airplanes, semiconductors and food.
Despite the widening of the overall trade gap, the petroleum deficit continued to narrow. Over the past several years, the amount of petroleum shipped to the US declined while domestic oil production increased.
The trade deficit for petroleum products fell to $7.67 billion in march, the lowest since june 2002. The average price of a barrel of imported crude oil was $46.47, down from $93.91 a year earlier, the Commerce Department said.
After hitting nearly $100 a barrel last june, benchmark oil prices plunged through the second half of 2014 and have stayed near $50 a barrel most of this year.
The Commerce Department’s initial estimate of gross domestic product in the first quarter, released last month, showed global trade was a significant drag on US output. Net exports were a 1.25 percentage point drag on last quarter’s 0.2% annual growth pace.
Exports are a positive for economic growth, while imports are a negative. Data from tuesday’s report will be incorporated into the next GDP estimate, set to be released may 29.
How a turbulent global economy will affect the US expansion is on the minds of Federal Reserve officials. In a statement following last month’s policy meeting, central bankers acknowledged that economic growth slowed in the winter months. That could be a sign the Fed won’t move quickly to raise interest rates from near zero.
“The weak first-quarter data do give me pause,” Federal Reserve Bank of Chicago President Charles Evans said monday. “I would like to see confirmation that they are indeed a transitory aberration.”
The Commerce Department report on trade can be found at http://www.census.gov/ft900.