ECONOMY

US trade deficit falls 8.3 percent in January to $41.8 billion as exports, imports fall

FILE - In this Feb. 15, 2015 file photo, the Space Needle towers in the background beyond a container ship anchored in Elliott Bay near downtown Seattle. The Commerce Department releases international trade data for January on Friday, March 6, 2015. (AP Photo/Elaine Thompson, File)

FILE - In this Feb. 15, 2015 file photo, the Space Needle towers in the background beyond a container ship anchored in Elliott Bay near downtown Seattle. The Commerce Department releases international trade data for January on Friday, March 6, 2015. (AP Photo/Elaine Thompson, File)  (The Associated Press)

The U.S. trade deficit in January dropped sharply as both exports and imports fell.

The Commerce Department says the deficit fell 8.3 percent to $41.8 billion in January, down from $45.6 billion in December. The shrinking trade gap reflected a drop in exports, which fell $5.6 billion to $189.4 billion. Imports fell $9.4 billion to $231.1 billion.

Much of the dip in imports likely came from lower oil prices and a labor dispute that disrupted shipping at West Coast ports. At the same time, the strong dollar that has made American-made goods less affordable abroad is weighing down exports.

Economists expect the deficit to widen further in 2015 as stable growth in the United States drives imports and tepid growth overseas paired with a strong dollar depress exports.