- The U.S. trade deficit rose to $74.4 billion in March from $70.5 billion in March. Total exports (goods and services) increased by 6.6% (-2.4% in February), while imports went up by 6.3% (-0.7% in February).
- Goods exports increased by 8.9% (-3.4% in February). Gains were across the board, with consumer goods (13.3%), other goods (12.9%) and industrial supplies (11.2%) registering the largest increases. Accounting for price changes, real goods exports expanded by 6.6% in March.
- Goods imports increased by 7.0% (compared to -0.9% in February). All product categories registered gains, with other goods (8.7%) and industrial supplies (7.9%) seeing the biggest jumps compared to February. Excluding price changes, real imports increased by 5.6% in March.
- Meanwhile, exports of services expanded by 1.4% (+0.03% in February) for the month, while imports grew by 2.8% (0.03% in February).
Key Implications
- After dropping in February, exports and imports of goods registered an increase in March. A year after the pandemic hit, exports have finally crossed pre-pandemic levels, up 8.1% from March 2020. Meanwhile, imports are now 18.1% above year ago levels.
- Delving deeper into the data reveals the services sector still struggling to come to terms with the pandemic. While goods exports are 11.9% higher than year-ago levels, services exports are still 0.6% lower. Despite improving on the month, the recovery in services trade is more susceptible to the rise in cases than goods trade.
- Despite massive fiscal stimulus, we expect the stop-and-go trend in U.S. trade to continue. Vaccine administration is slowing down in the U.S. and cases are on the rise across several American trading partners. It will take several months before restrictions are fully eased, either in the U.S. or abroad. Until then, the trade recovery (particularly services trade) will remain uncertain.
