US trade deficit hits record as economy accelerates

The US trade deficit rose to a record value in February as economic activity in the country improved at a faster pace than its counterparts around the world, and this improvement may continue until the end of this year due to the huge fiscal stimulus that is expected to push the economy to grow at the fastest pace in four decades.

As the recovery of the economy is due to the application of large numbers of Covid-19 vaccines, in addition to the aid package provided by the White House to overcome the epidemic crisis, which amounted to 1.9 trillion dollars, which led to an increase in domestic demand, which is often met by imported goods.

It is reported that US President Joe Biden proposed last week a $2 trillion infrastructure restoration plan, and this plan is expected to raise the volume of imports, which will ignite US economic growth.

The trade deficit increased by 4.8% to a record value of $71.1 billion last February, knowing that analysts had expected a deficit of $70.5 billion, and the trade goods gap also hit a new record, however, exports decreased by 2.6% to a value of $187.3 billion, while exports of merchandise in particular decreased by 3.5% to $131 billion, mostly affected by the unusually cold weather in many parts of the country.

The decline was mainly in the shipments of capital goods, which decreased by about 2.5 billion dollars, and exports of consumer goods also decreased, as well as exports of cars, spare parts and engines, in addition food exports also witnessed a decrease, and the pandemic continues to impede exports of services, the most important of which is travel.

Total exports decreased by 0.7% to $258.3 billion, and total merchandise exports declined by 0.9% to $219.1 billion.

It is possible that this decline reflects restrictions in supply chains as well as weak domestic demand. In fact, imports of capital goods recorded a record level due to increased demand, especially for civil aircraft, medical and electronic equipment, and according to the shares and stock market, shares were trading on Wall Street at a high price, but the dollar currency fell against several other currencies, and the US Treasury prices were mostly high.

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