Trade Deficit Shrinks

- The Trade Deficit for March shrank to -$58.2 billion versus estimates of -$61.0 billion and -$61.7 billion in February.

BOTTOM LINE: The US trade deficit shrank more than forecast in March as imports fell by 2.9%, the most in more than six years, Bloomberg reported. The quantity of petroleum purchased by US customers from overseas was the lowest since February 2007. The deficit with China was the lowest in two years. After subtracting the influence of prices, which are the numbers used to compute GDP, the trade deficit shrank to $47.2 billion, the lowest since November 2003. Total exports fell 1.7% from a record to $148.5 billion, led by a decline in sales of commercial aircraft, autos and petroleum products. Demand for American goods from the European Union and South/Central America set records in March. I expect the trade deficit to continue to improve over the intermediate-term.