Consumers and businesses in the United States are continuing to buy far more foreign goods than America exports overseas, resulting in an ever-widening trade deficit that weighed on economic growth figures released Thursday.
Demand by American businesses for foreign petroleum and other industrial products surged in March, while households bought more foreign cars and other consumer products, an advance estimate of trade data released by the Census Bureau on Wednesday showed.
U.S. exports also hit a record in March of $169.3 billion, but they were far outpaced by imports, which reached $294.6 billion. As a result, the trade deficit in goods widened nearly 18 percent to $125.3 billion last month, a record figure.
Those trade flows depressed America’s economic growth figures for the first quarter, since the trade deficit is subtracted from the nation’s gross domestic product. Real gross domestic product, adjusted for inflation, declined 0.4 percent in the first quarter of 2022, following an increase of 1.7 percent in the fourth quarter of last year. But the data reflect a mix of economic factors, not all of them negative.
U.S. demand for imports has been buoyed by the strength of the American economy, which remains more robust than that of most foreign nations. Businesses have also been particularly intent on restocking their inventories, which were badly stretched by factory shutdowns and surging demand during the pandemic.
Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said in a research note on Wednesday that the biggest driver of the surging trade deficit since November was soaring imports of consumer goods. Mr. Shepherdson noted that the increase probably stemmed from companies — many of which are carrying low inventory relative to before the pandemic — replenishing their stock.
He said it was not clear how long this rebuilding would continue, “but for now we see no sign that the pace of inventory accumulation is slowing.”
Surging prices for all manner of goods in the first quarter also played a major role in pushing up the dollar value of imports, exports and the trade deficit, none of which are adjusted for inflation.
Importers and exporters have faced a litany of supply chain challenges over the past two years, as companies attempted to cram record volumes of consumer goods through ports, warehouses and trucking lanes, as the pandemic sapped their workforces.
Congestion in some parts of the supply chain, like the U.S. trucking industry, appears to have eased in recent months, but in other areas new complications have arisen, stemming from the war in Ukraine and the continued global toll of coronavirus.
A report from analysts at Bank of America earlier this month said that the amount of trucking capacity available to shippers had recovered to its highest level since June 2020, while truckload spot rates have fallen in the last month.
Russia’s invasion of Ukraine has also disrupted flows of energy, food and other commodities, rupturing supply chains and sending prices of some goods soaring. And China, home to much of the world’s manufacturing, is imposing sweeping lockdowns to prevent the coronavirus from spreading further.
Tracking by Flexport, a freight forwarder, shows it took an average of 112 days to ship a container from China to the United States as of April 23, compared with fewer than 50 days before the pandemic. The measure fell slightly earlier this year, but has crept back up in recent months.
Shipping rates have also eased slightly, but remain far higher than they were two years ago.
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