empty
08.03.2023 11:44 PM
Imports of goods to the U.S. are steadily increasing

The U.S. trade deficit grew to the widest in three months at the start of the year, thanks to a strong pickup in imports of merchandise.

U.S. merchandise imports are rising moderately

The opening of China and the abandonment of quarantine measures around the world have led to a recovery in supply chains. This has not slowed the volume of shipments to developed countries. The U.S., like European countries, has significantly increased shipments of finished and semi-finished goods to the country.

The median estimate in a Bloomberg survey of economists called for a $68.7 billion gap, up 1.6% from a month earlier in January.

Probably, the reason for that is buoyant exports, including energy exports to European countries, as many months of the dollar's decline also helped stimulate purchases of goods by U.S. manufacturers. Inflation-adjusted exports of consumer goods, automobiles and parts reached record levels, and the real value of shipments of capital goods overseas was the highest since March 2019. Overall, the U.S. shipped more goods in January compared to December 2022.

The increase in exports is noted for the first time since August 2022. At the same time, it took place in almost all industries. Pharmaceutical and other consumer segments, capital equipment, and automobiles were notable.

At the same time, so-called "travel exports," that is, the amount travelers spend in the U.S., fell to $12.1 billion, while travel imports, a measure of the number of trips Americans make abroad, rose to $11.9 billion, a record gap. Apparently, the weak dollar has so far provided little incentive for foreigners to visit America.

As a result, the value of imports rose 3%, to $325.8 billion, while exports rose to $257.5 billion. Net exports are expected to add about 0.6 percentage point to growth in the first quarter. This exceeds fourth-quarter trade growth, but not as much as the import component.

The stable domestic economy and the "commodity hunger" of earlier periods helped support import demand. In addition, reduced shipping congestion and the normalization of global supply chains have generally helped trade between the U.S. and other countries. For example, the U.S. merchandise trade deficit with China, unadjusted, widened to $25.2 billion from $23.5 billion.

Despite the growth of commodity transactions, economists give restrained forecasts, expecting the "commodity hunger" to soon be saturated and demand to fall due to rising prices.

This is indirectly evidenced by an adjustment for inflation. While the nominal merchandise trade deficit narrowed slightly, January's adjusted merchandise deficit widened to $101.8 billion, also the largest in three months. There are nuances here, however.

Indeed, the drop in demand now looming this summer may reduce inflationary pressures. However, rising wages have the potential to stimulate demand for both goods and services. Given the "cheap wages" effect, where inflation quickly eats away at savings, the public tends to invest in real estate and, with little savings, in durable goods. Demand for goods is likely to remain at a fairly high level, preventing the import component in the U.S. balance of trade from declining. Buoyant demand, in turn, will keep the dollar from falling too much. But it will be a negative factor for the economies of developing countries.

Egor Danilov,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Robinhood drops from the S&P 500 — domino effect hits global markets

Robinhood shares fell after the trading platform was excluded from the S&P 500. Warner Bros. stock declined following the company's announcement of plans to restructure its business. European stocks slid

14:54 2025-06-11 UTC+2

Daily contrasts: Nikkei rises, EUR slips, global markets hold breath ahead of US-China talks

J.M. Smucker declines. The World Bank cuts its 2025 global growth forecast. Nikkei advances, while Wall Street futures and the euro weaken. The dollar shows little movement, and bond markets

14:31 2025-06-11 UTC+2

US Market News Digest for June 11

The US stock market has reached projected levels and now enters a "quiet scouting phase" as investors await the release of key inflation figures. The upcoming data

Ekaterina Kiseleva 13:57 2025-06-11 UTC+2

Contrasts of the day: Nikkei up, euro down, world holds breath ahead of US-China talks

J.M. Smucker falls after pessimistic forecast World Bank cuts global growth forecast for 2025 Nikkei up, Wall Street futures and euro fall Dollar little changed, bonds await CPI and auction

Thomas Frank 07:48 2025-06-11 UTC+2

Rates rise: markets Await CPI, Trump clashes with Musk, Qualcomm acquires Alphawave

The May CPI report is set for release on Wednesday. A budget bill takes center stage amid a public disagreement between Trump and Musk. Alphawave surged following news

14:05 2025-06-10 UTC+2

US Market News Digest for June 10

The S&P 500 and Nasdaq 100 indices posted notable gains, driven by upbeat expectations ahead of the upcoming US-China trade negotiations. Investors are betting on a potential easing of tariffs

Ekaterina Kiseleva 12:52 2025-06-10 UTC+2

Robinhood Drops From S&P 500 — Domino Effect Hits Entire Market

Robinhood Falls After Platform Expelled From S&P 500 Warner Bros. Shares Fall After Company Says Plans to Split Business European Stocks Fall on UBS Drop, U.S.-China Trade Talks Loom McDonald's

Thomas Frank 12:49 2025-06-10 UTC+2

Rates rise as markets await CPI, Trump spar with Musk, Qualcomm acquires Alphawave

May CPI report due Wednesday Budget bill in spotlight amid Trump-Musk rift Alphawave jumps on Qualcomm takeover plans WPP falls after CEO resignation announcement S&P 500 just over 2% above

Thomas Frank 11:49 2025-06-09 UTC+2

Clash of the Titans: Musk vs. Trump as Investors Count Losses

Dow -0.25%, S&P 500 -0.53%, Nasdaq -0.83% Tesla Falls as Trump-Musk Public Feud Grows Initial Jobless Claims Rise for Second Week in a Row Adidas, Puma Shares Fall After Lululemon

Thomas Frank 11:45 2025-06-06 UTC+2

Diverging markets: US stocks stall, Asia accelerates

Dow: -0.22%; S&P 500: flat; Nasdaq: +0.32%. The US services sector contracted in May for the first time in nearly a year. CrowdStrike slumped on a downbeat revenue forecast

12:40 2025-06-05 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.