WASHINGTON -- The US trade deficit fell sharply in March to $54.99 billion, the lowest level in six months, as US exports climbed to an all-time high. Imports declined, reflecting in part a slowdown in clothing shipments from China.
The Commerce Department reported yesterday that the gap between what the United States imports and what it sells to foreign countries narrowed by 9.2 percent from a record monthly deficit of $60.57 billion set in February.
Even with the big improvement in March, the deficit through the first three months of this year is still running at an annual rate of $696 billion, 12.8 percent higher than the $617.08 billion record set for all of 2004.
The March narrowing caught economists by surprise. They had been forecasting the trade gap would hit another record.
However, they cautioned against reading too much into one month's improvement.
''This is a brief respite from a lot of continued red ink," said Mark Zandi, chief economist at Economy.com. ''The large decline clearly overstates any improvement we will see this year."
The trade deficit, which has set records in six of the past seven years, has battered America's manufacturing companies, which have lost more than 3 million jobs since mid-2000.
Wall Street was bolstered by the better-than-expected trade performance, plus good news on falling oil prices. The Dow Jones industrial average rose 19.14 points to close at 10,300.25.
The March trade improvement reflected a 1.5 percent increase in exports of US goods and services, which rose to an all-time high of $102.2 billion.
It was the fourth straight monthly record for US export sales and reflected big gains in shipments of a wide range of products from commercial aircraft and telecommunications equipment to soybeans, corn, and other farm products.