The US trade deficit surged to its highest level in nearly six and a half years in March as imports rebounded strongly after being held down by a labor dispute at key West Coast ports, suggesting the economy contracted in the first quarter.
The US Commerce Department said today that the deficit on the trade balance jumped 43.1% to $51.4 billion, the largest since October 2008.
The percent rise also was the biggest since December 1996.
February's shortfall was revised to $35.9 billion from a previously reported $35.4 billion. Economists polled by Reuters had forecast the trade deficit rising to $41.2 billion.
When adjusted for inflation, the deficit widened to $67.2 billion in March, the largest in eight years, from $51.2 billion the previous month.
March's trade gap was far larger than the $45.2 billion deficit the government assumed in its snapshot of first-quarter gross domestic product last week.
In that report, the US government estimated trade sliced off 1.25 percentage points from GDP, helping to pull down growth to a 0.2% annual pace.
The US economy had expanded at a 2.2% rate in the fourth quarter.
With March's trade deficit coming in bigger than assumed, growth is likely to be revised down to show a contraction when the government publishes its second GDP estimate later this month.
The now-settled labour dispute at the West Coast ports significantly slowed imports and exports at the start of the year.
The dollar, which has gained about 12% against the currencies of America's main trading partners since last June, has also weighed on trade. In March, imports jumped 7.7%, the largest increase on record, to $239.2 billion. Imports are a drag on growth.
Some of the imported goods in March likely ended up as inventories, which in the first quarter recorded their biggest increase since the third quarter of 2010.
Imports of food and capital and consumer goods were the highest on record, while imports of industrial supplies and materials were the lowest on record.
Imports of petroleum products hit a record low, highlighting lower crude oil prices and increased energy production in the US, which has reduced its dependence on foreign oil.
The average import price for crude oil was $46.47 a barrel in March, the lowest in six years.
Today's figures show that exports increased 0.9% to $187.8 billion in March. Petroleum exports were the lowest since February 2011.
Exports to the European Union rose 8.6%, with those to Germany reaching their highest level since October 2008.
The US sold the fewest amount of goods and services to Brazil since April 2010. Exports to Canada and Mexico - the main US trading partners - were up in March.
Exports to China increased 13.6%, while imports from that country jumped 31.6%. That left the politically sensitive US-China trade deficit at $31.2 billion, up 38.6% from February.
Today's figures also showed that the US trade deficit with Japan was the largest in two years.