By Nathalie Voit
The U.S. trade deficit hit an all-time high in March amid a record surge in imports, the Commerce Department said in a press release published on May 4.
The goods and services deficit rose by 22.3% in February, or $20.0 billion, to $109.8 billion in March. March was the first time in Commerce Department history that a monthly deficit exceeded $100 billion.
The record-setting figure was driven by strong demand for imported goods from businesses seeking to replenish depleted stockpiles.
Industrial supplies and materials drove the surge in imports, increasing by $11.3 billion. Consumer goods came close behind, rising by $10.0 billion. Imports of capital goods such as computers followed suit, accelerating by $5.2 billion. The automotive vehicles, parts, and engines also posted strong gains at $3.2 billion.
Overall, March imports were $351.5 billion, up $32.9 billion or 10.3% from February. Exports were $241.7 billion, $12.9 billion or 5.6% more than February exports.
The record deficit chipped away at gross domestic product (GDP) in the first quarter, slashing it by 3.2%. After accelerating at a robust 6.9% pace in the fourth quarter, GDP fell at an annualized rate of 1.4% to start the year, the Commerce Department reported on April 28.
This was the first time since 2020 that the U.S. economy contracted, the government said.