The U.S. Commerce Department provided some rather positive economic news earlier this morning, when it reported that the nation's trade deficit had narrowed dramatically in February, with the massive trade gap falling from a near-record $52.5 billion in January to $46.0 billion in February. Expectations had been that the deficit would have flattened out in the latest month, coming in at $52.2 billion. In all, it was the largest decline in the monthly trade gap in nearly three years, as the trade shortfall tumbled by 12.4% in the latest reporting month.
Breaking the report down, we find that exports increased to a record $181.2 billion in February. That was from $180.9 billion in January. At the same time, imports decreased to $227.2 billion in February from $233.4 billion during the prior month.
Helping to narrow the shortfall in February was a drop in demand for oil following an earlier spike in the use of that core commodity. In fact, crude oil import volumes fell to their lowest levels in some 15 years in February, which was likely a reflection of the record high temperatures across the country this past winter. All told, oil imports plunged to 225.7 million barrels in February from 270.7 million barrels in January.
Meanwhile, the average price of crude also dipped in February, falling by 18 cents a barrel, to $103.63 a barrel. Moreover the trade deficit with China narrowed unexpectedly, tumbling by more than 25% in February. That country is our second largest trading partner, and has been the source of some harsh rhetoric in the political arena this election year.
Taken as a whole, the report was decidedly positive, and along with a tame Producer Price Index report issued this morning at the same time, helped to balance out a poor jobless claims survey, as layoffs picked up noticeably in the latest seven-day stretch, rising to a multi-week high of 380,000.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.