A recent jump in exports is causing American factories to increase hiring and raise production of goods and services to meet the higher demand from overseas customers, signaling that U.S. factories are benefiting from global economic stability.
According to the Commerce Department on Tuesday, “The trade gap in goods and services fell 9.6% in February from a month earlier to a seasonally adjusted $43.56 billion. Imports fell 1.8% while exports grew 0.2%.”
Economists projected a $44.6 billion gap, according to a report in The Wall Street Journal, which notes that “the economy may have grown at a slightly stronger pace than previously thought in the first quarter and is positioned for stronger growth this spring.”
In February, exports of products made in the United States reportedly reached the highest level on record, and the export of services also increased nicely, having risen more than 7 percent in comparison to last year.
At the same time, imports of consumer goods from outside the country are down.
“Economic growth remained sluggish overall in the first three months of the year, in part due to the persistent trade deficit. Private-sector economists estimate the economy grew at about a 1% annual rate in the first quarter, down from the fourth quarter’s 2.1% expansion,” according to the report, which noted that more hiring and production should cause a rebound in the second quarter.
According to the Institute for Supply Management, manufacturing activity expanded in March for the seventh consecutive month, as exports hit record highs not seen since November 2013.
A trade gap in the U.S. economy is due to Americans buying imported goods and commodities. However, President Trump put the spotlight on our trade deficit with China during his presidential campaign, claiming that they were unfairly manipulating their currency, hurting U.S. exporters.
President Trump and Chinese leader Xi Jinping are planning to meet for the first time at Mar-a-Lago in Florida on Thursday.
The value of imports from China dropped sharply in February, and the U.S. trade gap with China has fallen 4.9% this year as compared to last year. Despite this fact, no other country has a greater deficit with the United States than China.
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