The US trade deficit narrowed to $37.29B in January from a downwardly revised $39.9B shortfall in December. Expectations had been for a trade gap of $40.8 billion. Exports decreased 0.3%, but imports fell a larger 1.7%.

Imports fell to $180B from $183.1B in December as the US imported 245 million barrels of oil, the fewest since February 1999. The decrease in volume swamped what was an increase in oil prices during that time. Also, purchases of foreign-made automobiles and parts dropped by $1.48B, as US consumers bought less German and Japanese cars. While a drop in imports of crude is a positive the decrease in consumer spending was a negative. Imports are set to rebound as a growing economy should boost consumer spending while oil prices continue to climb.

Exports meanwhile decreased by $500M to $142.7B. Foreign demand for cars and airplanes declined. Boeing showed that orders for aircrafto for overseas buyers fell to 23 for the month, down from 38 in December. However, foreign deliveries climbed to 28 in February. A slowdown in US exports is a negative for economic growth, as it has been the manfuacturing sector that has helepd to spearhead the recovery. Exports accounted for 2.32 percentage points of fourth-quarter growth, the most in 13 years. That means that consumer spending, which makes up about 70% of US economic activity continies to take a back seat during the recovery.

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