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U.S. trade deficit widens slightly in January, second highest on record

The numbers: The U.S. trade deficit in goods widened to $83.7 billion in January from a revised $83.2 billion in the prior month, the Commerce Department said Friday. It was the second highest gap on record.

What happened: Imports of goods such as consumer electronics rose 1.1% to $218.9 billion in January. Goods imports were up 8.2% compared to a year earlier.

Exports rose 1.4% to $135.2 billion. They are down 0.7% compared with one year ago.

An advanced look at wholesale inventories, meanwhile, showed a 1.3% gain in January. And an early look at retail inventories showed that category down 0.6%. Auto inventories fell a sharp 1.4% in the month.

Big picture: With the U.S. economy expected to improve as the year progresses, the country could be a locomotive for trade-related growth in the economies of its trading partners, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

A fuller report on the U.S. trade deficit that includes services such as tourism and finance will be issued next week. The U.S. usually has a strong surplus in services because of tourism, but the sector has suffered during the pandemic.

Market reaction: Dow futures pointed lower on Friday after the Dow Jones Industrial Average
DJIA,
-0.27%

tumbled almost 560 points in the prior day’s trading session.

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