The U.S. trade deficit in January dropped sharply as both exports and imports fell.
The Commerce Department said Friday that the deficit fell 8.3% to $41.8 billion in January from $45.6 billion in December. The shrinking trade gap reflected a drop in exports, which fell $5.6 billion to $189.4 billion. Imports fell $9.4 billion to $231.1 billion.
Much of the dip in imports likely came from lower oil prices and a labor dispute that disrupted shipping at West Coast ports. At the same time, the strong dollar that has made American-made goods less affordable abroad is weighing down exports.
The trade deficit reached $505 billion last year, up 6% from the 2013 deficit of $476.4 billion. It was the largest imbalance since 2012. Economists expect the deficit to widen further in 2015 as stable growth in the United States drives imports and tepid growth overseas paired with a strong dollar depress exports.
The politically sensitive deficit with China was $29.3 billion in January. That constant gap has created pressure on
Yet a domestic energy boom has kept the deficit in check.