WASHINGTON (Reuters) - The U.S. trade gap widened in March for the first time in eight months, as oil imports jumped and weak overseas demand took a bite out of exports.
The trade gap grew to $27.6 billion in March, the U.S. Commerce Department reported on Tuesday, after shrinking in each of the previous seven months and hitting its lowest level in nine years in February.
Both U.S. imports and exports have fallen sharply since last July, as the global finance crisis has tightened credit and caused consumers and businesses to cut spending.
“The real story is much the same as it has been in recent months: global trade is drying up,” said Tim Quinlan, economic analyst with Wachovia.
However, in a sign the U.S. economy could be nearing a turnaround, imports declined at a slower rate, down 1 percent in March compared with a 5.1 percent drop in February and even bigger declines in some preceding months.
The deficit also was smaller than the U.S. government expected when it reported U.S. economic output contracted 6.1 percent in the first quarter.
“Taking account of all information presently available, it is likely that the Q1 GDP decline will be revised from 6.1 percent to 5.7 percent,” said Nigel Gault, chief economist at IHS Global Insight.
U.S. markets mostly shrugged off the trade data.
Stocks extended losses on Tuesday as financial shares slid sharply for a second straight day amid concern there were too few catalysts on the horizon to sustain the recent rally.
Meanwhile, the dollar fell to a four-month low on growing optimism about the global recession that is denting the greenback’s safe-haven appeal.
Average oil prices jumped more than $2 a barrel in March to $41.36 a barrel. The quantity of oil imports also rose for the first time since November.
That pushed the monthly petroleum import tab to a seasonally adjusted $17.2 billion, up slightly from February but still about half what it was in March 2008 when crude prices averaged $89.85 a barrel.
A further rise in oil prices since March suggests the trade gap could widen further in the months ahead, especially if exports remain weak.
“I believe the gap will start to widen out as oil goes higher and we see some recovery,” said Steve Goldman, market strategist at Weeden & Co. in Greenwich, Connecticut.
U.S. exports tumbled in March to $123.6 billion, after rising for one month in February. The March downturn resumed a trend dating back to July.
“The steepest export declines are behind us. But given the weak state of overseas economies, we do not expect the U.S. recovery to be export-led,” Gault said.
U.S. exports to China grew 19.1 percent in March to $5.6 billion, the highest in five months. However, U.S. imports from China also increased and the politically sensitive trade gap with that country grew to $15.6 billion in March.
In a separate report, the National Association of Realtors said U.S. home prices dropped in 134 out of 152 metro areas on a year-over-year basis during the first quarter of 2009.
The national median price for an existing single-family home was $169,000, 13.8 percent lower than in the first quarter of 2008. The median is the half-way point, with half the prices above and half below this level.
The real estate lobby group said foreclosures and short sales were keeping prices down.
Editing by Leslie Adler