18 April 2002, 10:44   The U.S. February trade balance widened to -$31.5 billion

WASHINGTON (MktNews) - The U.S. February trade balance widened to -$31.5 billion, its worst reading since April 2001 and much wider than the -$29.5 billion expected by private economists, but most of the unexpected jump was probably due to one-time gains in imports. Imports soared $4.2 billion, more than the $1 billion gain in exports. A big chunk of the import gain was in autos & parts at +$1.6 billion as car sales held at decent levels. Another chunk (about $0.6 billion) reflected services imports in royalties due to payments to the International Olympics Committee for broadcast rights. Even without portions of these special items, the trade deficit would have widened slightly for a second month, movement that is consistent with U.S. economic recovery. Imported consumer goods were up $1.1 billion across many categories, including household goods, drugs, and toys. Capital goods imports gained $0.5 billion, mostly due to jumps in semiconductors and telecom. Thus, the data also show re-stocking as the U.S. economy does better. The large trade gap will cut into GDP growth. The seasonally adjusted constant dollar readings show the January-February average trade balance at -$41.6 billion, slightly more than 10% wider than the -$37.8 billion average of Q4. Goods trade balances by country showed continuing problems with Asia, probably reflecting weak demand as Japan's recession continues. The goods balance with Japan was -$5.7 billion versus -$4.8 billion in January. The Commerce Department noted February exports to Japan of $3.88 billion were the lowest since January 1994 and have declined $1.4 billion, or 26.5%, from last year. The goods trade balance with China was -$6.5 billion in February, versus -$6.9 billion in January; with OPEC it was -$1.9 billion versus -$2.6 billion in January as imported oil volume fell by 19% to 243 million barrels. The goods balance with the NICs was -$1.8 billion versus -$2.1 billion in January. February imports from the NICs were the lowest in two years.

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