The U.S. trade deficit unexpectedly declined in March for a second consecutive month, The Commerce Department said Friday. It is the first time there has been improvement in consecutive months in two years, according to the Associated Press.
The Commerce Department attributed the improvement to record U.S. exports and a big drop in the country's foreign oil bill, saying that the gap between what the country sells abroad and what it imports narrowed to $62 billion in March, the smallest deficit in seven months. An AP report indicated that it was a 5.5 percent improvement from February's $65.6 billion deficit which in turn had fallen from the all-time high of $68.6 billion set in January.
The last two-month improvement came in October and November 2003. Even with the improevement, the trade deficit through the first three months of this year is at an annual rate of of $785 billion, representing an 8.4 percent increased from last year's record high of $723.6 billion.
Meanwhile, the deficit with China rose by 12.5 percent in March to $15.6 billion despite U.S. exports to China hitting an all-time high.
The improvement for March was unexpected. Several economists had indicated they thought the deficit would rise to around $67 billion in March. they also cautioned against sizable improvements in coming months with oil prices above $70 per barrel.
The March deficit was the lowest monthly imbalance since a gap of $58.5 billion last August. The improvement reflected a 1.9 percent rise in U.S. exports of goods and services, which hit an all-time high of $114.7 billion.
The increase reflected strong gains in sales of electric generators, industrial machinery, computers and farm products.