US trade deficit widens in January
The US trade deficit has widened 16.5 percent in January as exports of goods and services declined, while imports increased.
The US Department of Commerce said that trade deficit widened to $44.4bn (£29.6bn, €34.1bn) in January from a revised $38.1bn in December. Economists expected the deficit to widen to $42.6bn.
January exports have declined by 1.2 percent to $184.5bn from the previous month on lower sales to Europe, China, Japan and Brazil, while imports were up 1.8 percent at $228.9bn, as oil imports rose 12.3 percent.
The country's deficit with China rose 13.6 percent to $27.8bn in January. In 2012, deficit with China rose to $315.1bn, the largest imbalance ever recorded with a single country. The development is expected to force the Obama administration to be stricter on China's trade practices.
On a year-on-year basis, trade deficit narrowed by $7.8bn, with 3.3 percent higher exports and 0.9 percent lower imports.
The lower exports in January followed an increase to a near-record high in December, which helped the economy to record a growth in the fourth quarter. Gross domestic product (GDP) grew at an annual rate of 0.1 percent in the October-December quarter, as per the revised official data.
Despite the disappointing results for January, economists expect the deficit to narrow slightly in 2013 due to continued gains in energy exports.
Production of oil and natural gas has been rising in the US as drillers discovered low-cost ways to tap energy reserves trapped in shale formations. They are using techniques such as horizontal drilling and hydraulic fracturing for shale gas production.
Increased production and lower input prices have lowered the US prices of crude oil and natural gas, but the refiners still generate a big margin.
In further good news for the economy, the number of initial jobless claims declined 7,000 to 340,000, according to the Labour Department.
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