(MENAFN- AFP) The US trade deficit grew more than expected in January as exports slumped, outpacing the fall in imports amid a slowing global economy, Commerce Department data released Friday showed.
The trade gap increased 2.2 percent to $45.7 billion in January, the largest shortfall in five months and well above the analyst estimate of $44.0 billion.
US exports and imports fell to their weakest levels in five years, reflecting the sluggishness in the global economy, falling oil prices and a strong dollar.
Exports of goods and services fell 2.1 percent to $176.5 billion, the lowest level since June 2011.
Imports fell 1.3 percent to $222.1 billion, their lowest since April 2011.
The December trade gap was revised upward to $44.7 billion from $43.4 billion.
"The strength of the dollar is severely impeding exporters, making US goods increasingly uncompetitive in the international marketplace. Sluggish global growth is also weighing on demand for US products," said Emily Mandel at Moody's Analytics.
It was the second consecutive month of a widening in the trade gap, underscoring the global slowdown led mainly by China.
Jim O'Sullivan, chief US economist at High Frequency Economics, said that if the January levels were sustained, weaker exports could shave about a half point on economic growth in the first quarter.
"Of course, despite the drag from trade, overall growth still looks strong enough to generate ongoing labor market improvement," O'Sullivan said, pointing out the Labor Department's February jobs report released Friday.
Jobs growth of 242,000 came in much better than expected and the unemployment rate held at 4.9 percent, an eight-year low, indicating employers were defying the global slowdown as consumer spending grew steadily, at least for now. US growth is expected to ease in the coming months.
- Widening China gap -
The politically sensitive goods trade gap with China, the biggest US trade partner, grew 3.6 percent to $28.9 billion in January. Exports, particularly civilian aircraft, to China fell to $8.21 billion, the lowest level since July 2011.
The gap had reached a new record of $365.7 billion in 2015, swelling six percent from 2014. US lawmakers have long criticized the Chinese government for keeping the yuan currency undervalued to gain an unfair trade advantage.
The second-largest US trade gap was with Japan, at $4.9 billion, but narrower than in December.
The US trade gap on petroleum products shrank 22 percent to $4.6 billion as oil prices fell. The average price of a barrel of crude oil was $32.06 in January, a level last seen in April 2004.
The goods trade gap with Canada, the number-two US trade partner, rose slightly to $2.4 billion. Goods exports to Canada, a North American Free Trade Agreement partner, at $19.8 billion, sank to a distant low of July 2010, as did imports.
The goods shortfall with Mexico, the other NAFTA partner, jumped 5.4 percent to $4.3 billion.
The deficit with the 28-nation European Union plummeted 35.0 percent to $8.8 billion as Europe grappled with weak growth and extremely low inflation. The US trade gap with Germany, Europe's powerhouse, fell to $4.5 billion, a two-year low.
Barclays analyst Jesse Hurwitz said that US exports would likely continue to drag on gross domestic product growth for some time.
"Weak foreign demand and the stronger dollar are headwinds to export growth, and we expect this trend to remain in place over the next several quarters," he said.
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