The Commerce Department reported that the trade deficit in January increased 9.6% to $48.5 billion from the $44.3 billion in December last year. The trade gap in January was the largest since March 2012, when the trade deficit was $50.2 billion.
According to the Commerce Department, the U.S. exports increased 0.6% to $192.1 billion, which was boosted by auto sales. Imports rose 2.3% to $240.6 billion, which was caused by mobile phones, oil and foreign-made cars. As a result, the trade deficit in January reached 5-year-high. Goods deficit jumped to $69.7 billion in January form $65.7 billion in December, and the service surplus dropped to $21.2 billion from $21.4 billion, according to the report.
Trade cut 1.7 percentage points from GDP in the fourth quarter, and an economist at Capital Economics said that net trade appears to be a drag on GDP again in the first quarter. “That said, the recent improvement in the surveys suggests that exports should have expanded at a stronger pace in both February and March, so any drag is likely to be far smaller than in the fourth quarter,” he added.
“In the coming months we will renegotiate bad trade deals and bring renewed energy to trade enforcement in defense of all hard-working Americans,” said Wilbur Ross, the Commerce Secretary. He said that there was much work to be done, after releasing the January trade data.