US goods trade deficit record high in January

Washington, 28 February 2022 (TDI): The US trade deficit in capital expanded gradually to hit a record high in January among an increase in imports as businesses continued to fill down inventories.

The rate of inventory accumulation is, however, slowing after accelerating in the 4^th quarter. This combined with the flow in the goods trade deficit could balance economic development this quarter.

The goods trade deficit increased 7.1 percent to an all-time hit high of $107.6 billion previous months, the Commerce Department of the United States said on Monday.

The imports of goods trade jumped 7 percent, led by motor vehicles and food goods. There remained also large surges in imports of industrial supplies, capital, and consumer goods. Imports of other goods, however, fell.

The exports fell 1.8 percent, balanced down by consumer goods, motor vehicles, food, and other goods. But exports of capital goods and industrial supplies enlarged.

Even trade has been a struggle on gross local product for six straight quarters. The rise in imports the previous month largely reflected the upgrading of inventories.

Likewise, stocks at traders increased 0.8 percent. Retail inventories rose 1.9 percent, boosted by a 2.4 percent rise in motor vehicle stocks. Without motor vehicles, retail inventories increased 1.7 percent after advancing 3.9 percent in December.

This module goes into the calculation of GDP growth. Even inventory assets rise at a seasonally adjusted annualized rate of $171.2 billion in the 4^th quarter.

Most economic experts see further scope for inventories to rise, noting that inflation-adjusted inventories remain below their pre-pandemic level.

Inventory-to-sales percentages are also low. The inventories contributed 4.90 percentage points to the 4^th quarter’s 7.0 percent annualized development rate.

Restocking, after three straight quarters throughout which inventories were drawn down, is supporting industrial growth. Growth approximations for the 1^st quarter range from as low as a 0.6 percent rate to as high as a 5.4 percent pace.