Trade Numbers Reflect Scope of Slump

The United States’ trade deficit widened for the first time in eight months in March, the government reported on Tuesday, primarily because of a drop in exports.


But economists said the sharp declines in the value of trade between the United States and the rest of the world appeared to be hitting a plateau. For economists, the new figures added another small piece of evidence to theories that the worst declines were over, and that the economy was beginning to stabilize, although at lower levels.

The total value of goods and services exported by the United States fell by $3 billion in March to $123.6 billion as overseas demand dropped for American-made automobiles, chemicals, airplanes and telecommunications equipment.

Import values fell $1.6 billion for the month, to $151.2 billion, as the country bought less foreign-made natural gas, fewer industrial goods and fewer consumer goods like clothing, cosmetics and televisions.

But imports of crude oil rose a seasonally adjusted $400 million for the month as prices rose from recent lows.

Still, plunging exports in China and the Philippines and sluggish industrial output in India underscored the fact that the world’s intertwined economies remain in the throes of a broad downturn.

The Commerce Department reported that the trade deficit grew to $27.6 billion in March, from $26.1 billion in February. That was a smaller increase than economists had been expecting.

“This is genuine improvement here,” said Aaron Smith, a senior economist at Moody’s Economy.com. “It does suggest that the worst of the global trade downturn is over. We are nearing stabilization in the economy, and it does look like we’ll resume growing in the third quarter.”

Imports have plunged 27 percent since last March, and the continuing declines suggest that businesses are still trying to reduce their inventories to match lower levels of consumer spending.

Consumer spending has fluctuated this year, and economists are uncertain about how American consumers will behave as unemployment rises and the country struggles to start growing again. Although consumer spending is no longer falling as quickly as it did last year, Americans are saving more and may act more conservatively as they worry about losing their jobs or a return to $4-a-gallon gasoline. Although the flow of goods and services between the United States and the rest of the world has slowed during the global downturn, American exports have held up relatively well, compared with plunging imports.

In February, exports rebounded slightly after six months of declines, growing by $2 billion as the country exported more automobiles, semiconductors, pharmaceuticals and chemicals. The increase helped bring the trade deficit to its lowest levels in nine years, and spurred discussion about whether the recession was beginning to bottom out.

In recent surveys of the manufacturing and service sectors, the Institute for Supply Management said declines in American exports were beginning to taper off slightly in April.

Demand for foreign-made electronic equipment, clothes and oil has dipped sharply as consumers cut their spending.

China reported on Tuesday that its exports fell 22.6 percent in April, a deeper drop than economists had expected, and a worse decline than in March, when overseas shipments dropped 17.1 percent.

In India, data also released Tuesday showed industrial output down 2.3 percent in March versus a year earlier, more than economists had expected, while the Philippines reported exports in March were 30.9 percent below a year earlier.

The data served as a sobering reminder that much of the global economy remains in the throes of a recession, and that a string of recent figures showing the pace of decline easing in parts of the world by no means heralded an actual turnaround.

China’s economy continues to grow, in part because of a huge package of spending and other stimulus efforts announced since November.

These measures have included a big burst of lending by the country’s state-owned banks, which helped send Chinese urban fixed-asset investment in the first four months of the year up 30.5 percent, according to figures released Tuesday — more than economists had forecast.

Other recent data have shown production activity slowly recovering, prompting economists at several Western banks to raise their forecasts for China’s economic growth.

Still, many analysts have continued to caution that a significant and sustained global recovery remains months off.

“China’s ongoing recovery is driven by fixed-asset investment, with a focus on infrastructure,” economists at Bank of America Merrill Lynch said in a research note on Tuesday. But with weak exports continuing to drag down China’s growth, they added, “the foundation for a recovery is still not firm.”