U.S. trade deficit lowest since 2009, ports dispute likely a factor

Thu Apr 2, 2015 8:35am EDT
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WASHINGTON (Reuters) - The U.S. trade deficit in February fell sharply to its lowest level since 2009, likely as a labor dispute at one of the country's main ports depressed both imports and exports.

But the smaller deficit, which could see economists raise their first-quarter growth estimates, is probably temporary given a stronger dollar and weaker global demand.

The Commerce Department said on Thursday the trade deficit narrowed 16.9 percent to $35.4 billion, the smallest since October 2009.

January's shortfall on the trade balance was revised to $42.7 billion from a previously reported $41.8 billion.

Economists polled by Reuters had forecast the trade deficit slipping to $41.2 billion.

When adjusted for inflation, the deficit narrowed to $50.8 billion in February from $54.6 billion the prior month.

The now-settled labor dispute at the West Coast ports appears to have slowed the flow of imports and exports. The strong dollar, weak global demand as well as lower crude oil prices also likely impacted the trade balance in February.

While the smaller trade deficit is positive for gross domestic product, it does little to change views that economic growth slowed sharply in the first quarter.

Growth estimates range between a 0.6 percent and 1.7 percent annual pace. The economy grew at a 2.2 percent pace in the fourth quarter.   Continued...

Workers sit next to bags containing sugar at the San Francisco Ameca sugar factory in the town of Ameca, Jalisco, February 18, 2011. REUTERS/Alejandro Acosta/Files