Trade deficit hits 15-month high
By MARTIN CRUTSINGER
WASHINGTON — The U.S. trade deficit rose to a 15-month high as rising oil prices pushed crude oil imports to the highest level since the fall of 2008, offsetting another strong gain in exports. The larger deficit is evidence of a rebounding U.S. economy.
Analysts expect this year's deficit to be up significantly from 2009, when it hit an eight-year low. But U.S. exports should keep growing, providing a major source of strength from American manufacturers, and will only be marginally affected by the European debt crisis.
The Commerce Department reported yesterday that the trade deficit rose 2.5 percent to $40.4 billion in March compared with the February imbalance. It was the largest monthly trade deficit since December 2008.
Exports of goods and services were up 3.2 percent to $147.87 billion, the highest level since October 2008. Imports were up 3.1 percent to $188.3 billion.
U.S. manufacturers, the standout performers so far in this recovery, will continue to get a boost from rising demand for their products, economists predicted. Their sales are being helped by a rebound in the global economy and declines in the value of the dollar against other major currencies.
The dollar has strengthened this year against the euro, the common currency of 16 European countries. That is largely the result of the debt crisis in Greece that could spread to other European countries, such as Spain and Portugal. The dollar is now about 15 percent stronger against the euro than it was in December.
Economists said this will dampen U.S. export sales to Europe and also increase demand for European products, such as cars.
But the changes had not been significant enough to derail their expectations for steady gains in exports this year. That should continue as long as the debt crisis doesn't worsen and threaten to derail Europe's recovery.
"Greece is a small economy. The big countries, Germany and France, are still doing OK," said David Wyss, chief economist at Standard & Poor's in New York.
Wyss said export growth would add to the overall economy this year, providing a key boost to American manufacturers. But Wyss and other economists said that outlook could prove too optimistic if the debt crisis in Europe intensifies.
Greece, which uses the euro, accounts for only 0.2 percent of U.S. exports. But the 16 European nations that use the euro account for 15 percent of U.S. exports.
So far this year, the U.S. deficit is running at an annual rate of $467.2 billion, 23.4 percent higher than last year's imbalance of $378.6 billion.
For March, the rise in exports reflected increased sales of American farm products, led by gains in sales of corn, dairy products and rice. Sales of heavy machinery from electrical generators to earth-moving equipment also posted big increases, as did sales of semiconductors.