WASHINGTON – The trade of goods and services across U.S. borders softened in February, government data showed Tuesday, leading economists to forecast much weaker growth in the first quarter than previously expected.
“Overall, these data provide further evidence that the economy has slowed,” said Paul Dales, senior U.S. economist at Capital Economics.
Imports of goods and services dropped by 1.7 percent to a seasonally adjusted $210.9 billion during February, while exports declined 1.4 percent to $165.1 billion, the Commerce Department estimated.
The trade deficit – that is, the difference between exports and imports – narrowed to $45.8 billion for the month from an upwardly revised $47 billion in January, originally reported as $46.3 billion.
The 2.6 percent decline in the deficit was much less than expected. Analysts surveyed by MarketWatch had expected the deficit to narrow to $42.9 billion.
The trade deficit had widened by 16.7 percent in January.
The economy expanded at a 3.1 percent rate in the last three months of 2010, helped in large part by higher exports, but this positive contribution has reversed in the first three months of the year.
Inflation-adjusted exports of goods dropped 3.7 percent in February, and real imports of goods fell 3 percent.
The decline in exports was broad-based, led by automobiles and industrial supplies. There was a sharp increase in civilian-aircraft exports.
Imports of industrial supplies, capital goods and automobiles dropped on the month, more than offsetting an increase in consumer goods.