The U.S. trade deficit rose in February to its highest level in six months, indicating foreign trade will continue to be a drag on broader economic growth in the first quarter.
The Commerce Department reported Tuesday that the trade gap widened last month to a seasonally adjusted $47.06 billion, a 2.6% increase from January. Exports of goods and services rose 1%, the largest gain since September, but imports climbed 1.3%, their largest jump in 11 months.
Economists had forecast a deficit of $46.2 billion.
“We’re still seeing a trade drag” on overall economic growth, JPMorgan Chase economist Daniel Silver told The Wall Street Journal. “We saw pretty substantial dollar appreciation, which is now partially reversed.”
The dollar’s rise in value against other currencies since mid-2014 has made exports more expensive for foreign buyers. A strong dollar also makes imports to the United State less expensive, which can subtract from GDP growth.
Economists see trade subtracting at least seven-tenths of a percentage point from GDP growth in the first quarter. Barclays on Tuesday lowered its estimate for first-quarter GDP growth to a 0.4% rate, JPMorgan Chase predicted a 0.7% growth pace, and forecasting firm Macroeconomic Advisers projected a 1% growth rate.
GDP expanded at a 1.4% seasonally adjusted annual rate in the last quarter of 2015.
Exports in February were boosted by stronger sales of U.S.-made autos, but exports of industrial supplies and materials were the lowest in nearly six years. The value of petroleum imports hit their lowest level since September 2002 and petroleum exports were the lowest since September 2010, reflecting the oil price slump.