US: February trade deficit lower than expected  - Wells Fargo

According to analysts from Wells Fargo, trade figures were better-than-expected in February and they highlight a strong decline in the deficit versus Asia and Europe.

Key Quotes: 

“A large $4.3 billion decrease in the imports of goods, coupled with a small $0.4 billion increase in exports, were the reasons for the narrowing of the deficit in February.”

“A large drop in the importation of automotive and consumer goods products was the culprit of the decline in imports of goods in February. Automotive imports declined $2.6 billion and consumer goods imports dropped $3.1 billion after an increase of $0.9 billion and $2.4 billion in January, respectively. Overall, imports of goods and services declined 1.8 percent in February after an increase of 2.3 percent in January. But what is more important for U.S. GDP growth during the first quarter of the year is that real imports of goods declined by a larger 2.6 percent during the month after increasing 2.0 percent in January.”

“Meanwhile, exports of goods and services increased 0.2 percent during the second month of the year after increasing 0.8 percent in January. In real terms, exports of goods increased 0.3 percent after increasing 0.4 percent in January.”

“Another salient characteristic of February’s trade deficit was a large drop in the trade deficit with the Pacific Rim countries, specifically with China, and a smaller decline in the deficit versus Europe.”

“Meanwhile, the trade deficit with Europe declined from $13.9 billion in January to $10.7 billion in February. At the same time, the deficit with Mexico increased from $3.9 billion in January to $5.8 billion in February while the deficit with Canada declined from $3.4 billion in January to $2.1 billion in February.”