Trade Deficit increases in February 2008

The U.S. Department of Commerce announced that the Trade Deficit rose to $62.4 billion in February 2008 up from $59.0 Billion in January. The increase was due to a $6 billion increase in imported goods that was not offset by a $2.6 billion increase in exports and a minor increase in the service surplus of $0.1 billion.

The largest trade deficits (in billions) were with China $18.4 ($20.3 in January), OPEC $13.2 ($15.5), and Japan $6.9 ($6.6). Petroleum imports for February were at $37.745 billion compared to $39.785 billion in January.

The increase in the trade deficit was a surprise as the deficit normally decreases as the economy slows down. The trade deficit normally goes up and down with personal income (as discussed in last month's post).

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