Summary The U.S. trade balance held constant at a record deficit, but the steadiness of the U.S. trade balance is likely temporary. We expect the trade deficit to widen further over the coming quarters as U.S. businesses need to replenish inventories and exports look set to rise at only a moderate pace this year. The February data suggest net exports are still shaping up to be a considerable drag on first quarter growth. Some Time Away from Stabilization in Trade Balance The U.S. trade balance more or less held constant at a record deficit in February (chart). The balance narrowed only marginally by $44 million to a deficit of $89.19 billion in February from an upwardly revised $89.23 billion in January. This marks the smallest movement in the deficit since the start of 2020, after two years of extreme volatility in the month-to-month data (chart). There has been a clear widening in the trade balance since the start of the pandemic as a result of robust domestic demand for goods (chart). READ FULL ARTICLE>>
