The US trade deficit fell in February. Reuters reports:
The U.S. trade deficit narrowed in February as imports fell by the largest amount in nearly a year, and the trade gap with China shrank nearly 23 percent, the U.S. Commerce Department said on Wednesday.
The February trade shortfall at $65.7 billion was still the third highest on record, suggesting the annual trade deficit could surpass last year's record deficit of $723.6 billion...
U.S. imports fell 2.3 percent in February to $178.7 billion, the largest month-to-month decline since March 2005, but still the second highest on record after January. Many analysts had expected imports to retreat after surging in the first month of 2006... U.S. overall exports fell 1.2 percent in February to $113 billion, but like imports were second only to the record set in January.
The fall in the deficit may be temporary.
The politically sensitive trade deficit with China narrowed significantly in February to $13.8 billion, the lowest level since March 2005. However, analysts noted the deficit with China usually narrows early in the year due to disruptions caused by the Lunar New Year holidays.
China's March trade figures suggest as much. From AFP/CNA:
China's trade surplus surged 98.5 percent in March from a year earlier to 11.19 billion dollars...exports rising 28.3 percent year-on-year to 78.05 billion dollars and imports growing by 21 percent to 66.86 billion dollars, according to the commerce ministry's figures.
But China is not the only country with a large surplus. So is Japan. Again from AFP/CNA:
Japan's current account surplus grew to the second-highest level on record in February as rising exports and investment returns helped to keep the economic recovery on track.
The surplus in the current account, the broadest measure of trade in goods and services, grew 6.2 percent from a year earlier to 2.21 trillion yen (18.7 billion dollars), the finance ministry said...
In February exports surged 21.5 percent, up for the 27th straight month, while imports jumped 33.2 percent, the 24th consecutive monthly increase.
And a surplus is not just an Asian privilege. Canada's trade surplus widened in February by 2.4 percent on a fall in imports.
Among deficit countries, the UK and France, like the US, saw some improvement in their trade balances in February. The UK's goods trade gap narrowed to 6.478 billion pounds in February from a record 6.538 billion pounds in January, while France's trade deficit narrowed to 2.015 billion euros compared with a deficit of 2.414 billion euros in January.
Meanwhile, there was also news yesterday on euro-zone GDP growth. From AFX/Forbes:
Euro zone GDP grew 0.3 pct in the fourth quarter from the third quarter, down from a third quarter growth rate of 0.7 pct.
The figures are unchanged from Eurostat's previous estimates, published on March 3, and in line with market expectations...
Meanwhile, the European Commission unexpectedly lowered its forecasts for euro zone GDP growth in the first three quarters of this year...
The commission trimmed its forecast for first quarter growth to 0.4-0.8 pct from 0.4-0.9 pct previously.
Its forecast for second quarter growth was cut to 0.3-0.8 pct from 0.4-0.9 pct, and its projection for third quarter growth to 0.2-0.8 pct from 0.4-0.9 pct.
Economic research institutes also provided updated forecasts on euro-zone growth.
Euro zone GDP growth is expected to recover to 0.5 pct in the first quarter and then 0.6 pct in both the second and third quarters, according to the main economic institutes from Germany, France and Italy.
There was also news on GDP growth in China. From Reuters:
China's economy grew an estimated 8.5 percent in the first quarter from the year-earlier period, but is likely to slow to 7.5 percent for the full 2006 due to stricter controls on fixed asset investment, the country's top economic planning body said.