US Trade Deficit Hit All-Time High in Biden's First Full Month in Office
The U.S. trade deficit hit an all-time high in February as Americans bought more imported goods in President Joe Biden’s first month in office.
The trade deficit jumped 4.8 percent to $71.1 billion in February, according to a report released Wednesday from the Commerce Department.
The surge is a $3.3 billion increase from January’s deficit of $67.8 billion.
The US trade deficit in February surged to a record high, according to the latest @CommerceGov report. https://t.co/sDO5rSEbzW pic.twitter.com/BP4BlT2oQ5
— Steve Herman (@W7VOA) April 7, 2021
The record comes after Americans received more stimulus checks from Biden’s $1.9 trillion COVID relief bill.
The U.S. economy also gained 916,000 new jobs in March, according to MarketWatch.
“Faster U.S. growth relative to the rest of the world has widened the trade deficit to a historic record,” economists Oren Klachkin and Gregory Daco of Oxford Economics said.
“The trade deficit is poised to widen as the U.S. recovery surges in the spring and summer.”
Although both imports and exports were down in February, imports were only down 0.7 percent and totaled $258.3 billion.
The import level is almost 5 percent above the levels it reached in 2020, and MarketWatch predicted import purchases could have been higher if not for a “logjam at American ports.”
“Cargo ships have been forced to anchor outside the Los Angeles and Long Beach ports, where about a third of goods imports come through, as the ports struggle to unload the incoming ships,” Jay Bryson, chief economist at Wells Fargo Securities in Charlotte, North Carolina, told Reuters.
The U.S. Department of Commerce also reported the trade deficit in China spiked to $30.3 billion.
U.S. exports, on the other hand, were down 2.6 percent and totaled $187.3 billion, still failing to reach the $208 billion achieved in February 2020.
The U.S. exported fewer planes, computer chips, cars and food in February, contributing to a $4.8 billion decrease to $131.1 billion.
“The collapse of global travel is a huge hit to U.S. services exports,” senior economist Bill Adams of PNC Financial Services told MarketWatch.
The U.S. also recorded a net petroleum deficit for the first time since December 2019, Reuters reported.
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