U.S. Trade Deficit Narrows More Than Expected In January As Exports Surge

(RTTNews) - The Commerce Department released a report on Thursday showing the U.S. trade deficit narrowed by much more than expected in the month of January.

The report said the trade deficit shrank to $54.5 billion in January from a revised $72.9 billion in December.

Economists had expected the trade deficit to decrease to $67.9 billion from the $70.3 billion originally reported for the previous month.

The narrower than expected trade deficit came as the value of exports spiked by 5.5 percent to $302.1 billion in January after slumping by 1.6 percent to $286.3 billion in December.

Exports of industrial supplies and materials led the rebound amid sharp increases in exports of non-monetary gold and other precious metals.

The report also showed a jump in exports of capital goods like computers and civilian aircraft, while exports of pharmaceuticals decreased.

"Precious metals had a heavy hand in pushing exports higher so we expect the gap will normalize after these effects pass through," said Nationwide Senior Economist Ben Ayers. "Of course, this data tells us nothing about how trade will react to the Iranian conflict."

"It's not until we receive the March or even the April data that we'll start to see the impacts of the conflict on U.S. exports and imports," he added. "The situation is highly fluid, though for now we see exports suffering more than imports since the rest of the world is more exposed."

Meanwhile, the Commerce Department said the value of imports slid by 0.7 percent to $356.6 billion in January after surging by 3.5 percent to $359.2 billion in December.

Imports of pharmaceuticals and automotive vehicles, parts and engines slumped during the month, while imports of computers saw a notable increase.

The report also said the goods deficit narrowed to $81.8 billion in January from $99.2 billion in December, while the services surplus widened to $27.3 billion in January from $26.3 billion in December.