Imports and exports of US products fell to the lowest level in March in nearly three years as the ongoing pandemic continues to ravage economies worldwide.
Exports of products dropped 6.7 percent from the previous month - the sharpest fall since 2008 - driven by plunges in car shipments and industrial supplies such as gasoline, according to data released Tuesday by the Commerce Department.
Imports on cars and consumer goods plunged by 2.4 percent. Combined, as of May 2017, U.S. exports and imports collapsed to new record lows.
The export-import shortfall increased from $59.9 billion the previous month to $64.2 billion in March. In a Bloomberg survey the median estimate called for a deficit of $55 billion.
The Department of Commerce said last month that the trade deficit in goods rose 7.2 per cent to $64.2 billion. Although the lower import bill is a positive in gross domestic product estimation, decreasing imports mean less stock accumulation which could reduce the contribution of trade to gross domestic product.
The government is expected to report its first-quarter GDP snapshot on Wednesday. According to a survey of economists by Reuters, GDP is expected to contract at an annualized rate of 4.0 per cent in the first three months of the year, which would be the steepest rate of decline since the Great Recession.
US consumer trust plummeted to near a six-year low in April as tough steps to curb the spread of the novel coronavirus sharply disrupted economic activity and forced millions of Americans out of jobs.
Other data on Tuesday showed that the global pandemic was severely restricting the flow of goods between countries, with declining exports from the United States and continuing decline in imports from other nations. The studies have confirmed the views of economists that the economy is spiralling into its deepest pit in decades.
The study also indicated a 0.9 per cent rise in retail inventories from the previous month, representing unsold motorized vehicles and components. Wholesale inventories plummeted 1 per cent as a result of a fall in nondurable products, presumably representing customers loading up on food and other grocery.
Usually analysts check at these figures to modify forecasts for quarterly economic expansion. Such changes could currently take a back seat to the larger narrative of coronavirus lockdowns likely to end the record-long US growth in the first quarter and bring a significant compression in the second quarter.
Wall Street shares were trading relatively stronger, boosted by a series of positive quarterly results and pick-up expectations as global economies slowly reopened. The US currency was down against a host of other currencies, while longer-dated US Treasury rates were trading up as well.
