US trade deficit swells in January

The US trade deficit grew more than expected in January as exports fell more sharply than imports amid a slowing global economy, Commerce Department data released Friday showed.

The trade gap rose 2.2 percent to $45.7 billion in January, well above the analyst estimate of $44.0 billion. Reflecting the sluggishness in the global economy, falling oil prices and a strong dollar, US exports and imports fell to their weakest levels in five years.

Exports of goods and services fell 2.1 percent to $176.5 billion, the lowest level since June 2011.

Imports fell 1.3 percent to $222.1 billion, their lowest since April 2011.

The December trade gap was revised upward to $4.7 billion from $43.4 billion.

"If sustained, the January levels would result in net exports being about a 0.5 point drag on the real GDP growth rate in Q1," said Jim O'Sullivan, chief US economist at High Frequency Economics.

"Of course, despite the drag from trade, overall growth still looks strong enough to generate ongoing labor market improvement."

It was the second consecutive month of a widening trade shortfall, underscoring the global slowdown, led mainly by China and the sharp drop in oil prices since 2014.

Exports, particularly civilian aircraft, to China fell to $8.21 billion, the lowest level since July 2011, helping to widen the politically sensitive goods trade gap by 3.6 percent to $28.9 billion.

The gap had reached a new record of $365.7 billion in 2015, swelling six percent from 2014. US lawmakers have long criticized the Chinese government for keeping the yuan currency undervalued to gain an unfair trade advantage

The US trade gap on petroleum products shrank 22 percent to $4.6 billion as oil prices fell. The average price of a barrel of crude oil was $32.06 in January, a level last seen in April 2004.

Goods exports to key US trading partner Canada, at $19.8 billion, sank to a distant low of July 2010, as did imports from the northern neighbor.

The goods trade gap with Canada rose slightly to $2.4 billion.

The deficit with the 28-nation European Union plummeted 35.0 percent to $8.8 billion.