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The trade deficit widened 2.7% in February to a four-month high of $70.5 billion and pointed to more stress on the U.S. economy.
The trade gap rose from $68.7 billion in January and was slightly above Wall Street forecasts.
Both imports and exports fell in February, reflecting weaker growth in the U.S. and abroad.
Key details: Imports fell 1.5% to $321.7 billion in February to extend a recent string of declines, the government’s trade report showed.
Part of the drop reflects lower oil prices, but Americans have also trimmed spending in response to rising interest rates and a slower economy
In February, imports of cell phones, consumer goods, clothing and drugs retreated.
A further decline in imports would be a potential warning sign of worse to come. They have declined 8% since peaking in March 2021.
Exports slid a sharper 2.7% to $251.2 billion and also continued a recent downtrend. Just seven months ago they touched a record high.
A weaker global economy could further sap demand for American goods and services.
In February, exports of industrial supplies, autos and parts, consumer goods and passenger planes all declined.
Big picture: The U.S. is on track to break a string of three straight years of rising and record deficits, but not for reasons conducive to a healthy economy.
Looking ahead: “The sharp declines in both exports and imports in February add to the signs that economic growth is faltering,” said deputy chief U.S. economist Andrew Hunter of Capital Economics.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open slightly lower in Wednesday trades.
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