US trade deficit falls to $38.8 billion in March
BY MARTIN CRUTSINGER | AP Economics Writer May 2, 2013 8:22AM
Updated: May 2, 2013 8:22AM
WASHINGTON — The U.S. trade deficit narrowed in March for a second month as the daily flow of imported crude oil dropped to the lowest level in 17 years. The deficit with China hit a three-year low.
The trade deficit decreased to $38.8 billion, an 11 percent drop from February’s $43.6 billion, the Commerce Department reported Thursday.
Exports fell 0.9 percent to $184.3 billion as sales of machinery, autos and farm products all declined. Imports fell 2.8 percent to $223.1 billion, led by a 4.4 percent drop in foreign petroleum. Crude oil imports averaged just 7 million barrels per day, the lowest since March 1996.
A smaller trade gap can boost overall economic growth as American companies earn more from overseas sales while U.S. consumers and businesses spend less on foreign products.
For the first three months of this year, the trade deficit is running at an annual rate of $507.7 billion, 5.9 percent below last year’s deficit of $539.5 billion. Economists are looking for the deficit to narrow slightly this year, in part because they expect continued gains in U.S. exports.
The politically sensitive deficit with China shrank 23.6 percent in March to $17.9 billion, still far above the imbalance with any other country.
The deficit with the European Union grew 13 percent in March to $9.9 billion even though U.S. exports to the region rose 14.4 percent. But for the year, U.S. exports to Europe are down 8 percent compared to the same period in 2012, reflecting the impact of a recession in the 17 European Union countries that use the euro.
The European Central Bank announced Thursday that it was cutting its benchmark interest rate to a new record low in an effort to stimulate growth in the 17 European countries that use the euro currency.