U.S. Trade Deficit Soars To Record High In January

(RTTNews) - Reflecting a spike by the value of imports, the Commerce Department released a report on Thursday showing the U.S. trade deficit widened by more than expected in the month of January.

The Commerce Department said the trade deficit surged to a record high of $131.4 billion in January from a revised $98.1 billion in December.

Economists had expected the trade deficit to jump to $123.0 billion from the $98.4 billion originally reported for the previous month.

"The significantly wider trade deficit wasn't unexpected after last week's advance good trade report," said Nationwide Financial Markets Economist Oren Klachkin. "We think the headline exaggerates how much net trade will weigh on Q1 GDP growth since a surge in gold imports played an important role in widening the trade deficit."

He added, "This is not to say pre-emptive orders to front-run tariffs didn't take place; a record goods trade deficit with Canada and a wider deficit with China in January are evidence of this."

The notably wider trade deficit came as the value of imports soared by 10.0 percent to $401.2 billion in January after surging by 3.7 percent to $364.6 billion in December.

The report showed a spike in imports of industrial supplies and materials as well as notable increases in imports of consumer goods and capital goods.

Meanwhile, the Commerce Department said the value of exports climbed by 1.2 percent to $269.8 billion in January after tumbling by 2.6 percent to $266.5 billion in December.

Increases in exports of capital goods and consumer goods were partly offset by decreases in exports of foods, feeds and beverages and other goods.

The report also said the goods trade deficit widened to $156.8 billion in January from $123.3 billion in December, while the services trade surplus crept up to $25.4 billion in January from $25.2 billion in December.