Trade Deficit Increases in the US, As the Shut-Down Hurts Manufacturing

Posted Tuesday, April 28, 2020 by
Skerdian Meta • 1 min read

One of the main goals for Donald Trump when he became president of the US was to shrink the massive trade deficit. He has tried to do that, with some success, but now the deficit has jumped higher again. The shut-down due to coronavirus has nearly killed the service sector and the manufacturing sector is headed that way too, so the industrial production has declined, which means that imports have increased.

March trade data from the USA

  • March advance goods trade balance -$64.2 vs -$55.0B expected
  • February stood at -$59.6B
  • Imports -2.4% m/m
  • Exports -6.7% m/m
That’s a big miss for a trade report, by nearly $10 billion but March data and beyond is going to be very difficult to forecast. Imports have declined but exports have declined much more, which has added to the trade deficit for March. That can be shown by the decline in inventories. Even though consumption has declined, wholesale inventories have also declined in March, which was the largest decline since the economic crisis in 2009.

US wholesale inventories for March 2020

  • Wholesale inventories -1.0% versus -0.4% estimate.
  • The prior month came in at -0.7% him
  • The decline was the sharpest since September 2009
  • Retail inventories +0.9% versus 0.5% estimate
  • Prior month remains at -0.3%
  • Retail inventories excluding autos -1.3%
  • Retail motor vehicle and parts dealer inventories +5.1% versus -0.9% last month
  • Durable goods inventories rose 0.1% versus -0.8% in February
  • Non-durable goods inventories -2.6% versus -0.2%
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