April 2, 2026
The trade deficit for January widened by $2.7 billion in February to $57.3 billion after having narrowed by $18.2 billiion in January. Afetr having been extgremely volatile in the first half of last year as businesses adjusted to the new levels of tariffs, it has settled down in recent months at a leve roughly compable to where it was prior to the tariff changes.
Exports rose by $12.6 billiion or 4.2% in February to $314.8 billiion aftger having increased by $15.9 billion or 5.6% in January. In the past year exports have risen 12.2%.
Imports rose by $15.2 billion o 4.3% in February after having declined $2.3 billion or 0.6% in January In the past year imports have declined 7.1%.
The trade deficit in real terms widened bny $0.5 billion in February to $83.5 billion after having narrowed by $14.9 bilion in January.
At the moment we expect it to subtract about 0.5% from GDP growth in the first quarter. We expect 2.3% GDP growth in that quarter and 2.5% GDP growth for the year as a whole.
Stephen Slifer
NumberNomics
Charleston, SC
Hi Steve,
I’m a bit confused, has the deficit increased so sharply as a result of overall reduced economic activity? Or is there some other factor at play here? Material costs? or? This seems surprising with the general weakness of the dollar.
Best,
Hi Chris what we are have seen in the recent trade data as well as what happened to trade in the first few months of the year were wildly distorted by the recession and subsequent rebound. The dramatic narrowing of the trade gap earlier did not mean a lot. Nor does the recent rebound. I guess the only point I was trying to make is that the increases in both exports and imports tells us nothing more than the rebound is underway with the recovery in the U.S. currently outpacing the rest of the world.
Ah, that makes sense.
Thanks