WASHINGTON – The U.S. trade deficit (search) narrowed in February as a combination of the weak U.S. dollar and stronger economic growth propelled both exports and imports to record levels, a government report showed on Wednesday.
The February trade gap totaled $42.1 billion, down more than 3 percent from January and slightly below analysts' pre-report expectations of $42.5 billion.
U.S. exports leapt four percent — the highest monthly increase since October 1996 — to a record $92.4 billion, while imports rose 1.6 percent to a record $134.5 billion.
The politically sensitive trade gap with China fell nearly 28 percent in February as imports from that country slipped to $11.3 billion, the lowest level in nearly a year, and exports to China rose 17 percent to $3.0 billion.
The lower dollar appeared to help all categories of exports, as shipments of industrial supplies and materials and autos and auto parts both set records. Exports of consumer goods were only slightly below the record set in November and exports of capital goods, such as aircraft and industrial machines, were the highest since May 2001.
Exports of services, which include travel, also set a record.
Meanwhile, the surging U.S. economy sucked in record agricultural and industrial imports, while auto and auto parts imports had their second best showing.
However, oil imports fell to their lowest level since February 2003, while average oil prices rose for the fourth consecutive month to $29.17 per barrel.
Despite the monthly improvement in the trade deficit, analysts have said it could take several quarters to see a permanent improvement, in part because the weaker dollar and production cuts by the Organization of Petroleum Exporting Countries (search) have driven up the cost of petroleum imports.