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The U.S. trade deficit in goods deteriorated sharply in January as businesses continued to replenish depleted inventories.
Source: U.S. Department of Commerce
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The goods trade deficit rose 7.1% to $107.6 billion. Retail inventories jumped 1.9% as stocks at wholesalers rose slightly to 0.8%. High inventories add to gross domestic product.
The increase in inventories is likely to boost Wall Street economists to expand first-quarter GDP forecasts.
U.S. goods imports increased 1.85 in January to $262 billion. Exports of U.S.-manufactured goods dropped 1.8% to $154.8 billion.
The unusually sharp increase in the deficit in the prior months comes from U.S. ports in an effort to clear an unprecedented backlog of goods that have piled up in nearby warehouses.
The trade deficit is likely to remain close to record levels until the global economy catches up to the U.S. economy.
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