WASHINGTON (AP) — The U.S. trade deficit widened slightly in January as a rise in imports of oil and other foreign goods offset a solid increase in exports.
The trade deficit increased to $39.1 billion, up 0.3 percent from December's revised $39 billion deficit, the Commerce Department reported Friday.
Exports climbed 0.6 percent to $192.8 billion, led by increased sales of U.S.-made machinery, aircraft and medical equipment. Imports also rose 0.6 percent to $231.6 billion, reflecting a 9 percent jump in imports of petroleum. Imports of food and machinery also rose.
The trade deficit is the difference between imports and exports. A higher trade deficit acts as a drag on economic growth because it means U.S. companies are making less overseas then their foreign competitors are earning in U.S. sales.
Sal Guatieri, senior economist at BMO Capital Markets, said the January trade report suggests the trade deficit will remain on a gradual downward trend this year, reflecting a shrinking U.S. energy deficit.
In 2013, the trade deficit dropped 11.2 percent to $474.9 billion, providing a small boost to overall growth. Economists believe that trade will contribute to growth again this year but only by a modest amount. They are forecasting that U.S. exports will keep rising, but that this will be offset somewhat by gains in imports as a stronger U.S. and higher consumer spending attracts more foreign goods.
In the October-December quarter, the economy grew at an annual rate of 2.4 percent and a full percentage point of that growth came from a shrinking trade deficit. For the whole year, the falling trade deficit contributed a smaller 0.1 percentage point to growth.