US exports fall to the lowest level in over four years
The US trade deficit widened last month as exports fell to the lowest level in more than four years, indicating slower global economic growth remains a strain on the domestic economy.
The trade gap grew 2.2 percent from the prior month to a seasonally adjusted $45.7 billion, the US Commerce Department said Friday.
The trade deficit was wider than what most economists had estimated.
Exports remained under pressure from a strong dollar in January, falling 2.1 percent from the prior month. Imports also dropped 1.3 percent in January after slightly rising in December.
Last month’s level of American exported was the lowest since February 2011, indicating that the global economy remained weak.
In January, shipments of capital goods, industrial supplies, foods and consumer goods all decreased.
Exports to China, Canada and Latin America hit multi-year lows, reflecting how expensive it has become for consumers in those regions to buy American products.
The dollar is expected to strengthen further this year provided the US Federal Reserve proceeds with planned gradual increases in short-term interest rates.
“Higher US interest rates will likely strengthen the dollar further, just as many central banks around the world are loosening monetary policy and pushing their currencies in the opposite direction,” the Wall Street Journal reported.
“Some analysts said January’s trade report indicates the weakness in exports in the first month of the year is likely to translate into an even larger drag on growth from trade in the first quarter,” the Journal observed.
The US economy slowed sharply in the final three months of 2015 as American households curbed spending and corporations reduced capital investment, sparking fresh fears of anemic growth in the United States.
Gross domestic product, or GDP, increased at a 0.7 percent annual rate in the fourth quarter ending in December after a 2 percent increase in the third quarter, the US Commerce Department reported in late January.