The U.S. trade deficit narrowed sharply in March as demand for imports fell by the largest amount since the last recession was ending.
The Commerce Department reported Friday that the deficit totaled $58.2 billion, down 5.6% from February, a larger improvement than had been expected.
The smaller deficit reflected spreading weakness in the U.S. economy, which cut demand for imports by 2.9%, the largest one-month decline since December 2001, one month after the last recession ended.
The decline, which pushed imports down to $206.7 billion, was led by a 5.9% decrease in America's foreign oil bill. The amount of petroleum fell as the average price for crude oil rose to an all-time high. Imports of autos and a wide variety of other consumer goods also declined, reflecting the hard economic times facing consumers.
Exports, which have been one of the few strong points in this period of weakness, suffered a setback in March. They fell to $148.5 billion, the second-highest level on record but down 1.7% from the all-time high in February. Sales of commercial airliners, cars, computers and machinery were all down.
The big improvement in the March deficit was expected to prompt the government to revise upward its estimate for economic growth for the first three months of the year.
Ian Shepherdson, chief economist at High Frequency Economics, said he expected first-quarter growth to be revised to a rate of 1.1%, well above the government's initial estimate last week that the economy grew at a barely discernible 0.6% rate.
The politically sensitive trade deficit with China declined by 12.4% to $16.1 billion, the smallest level in two years, as U.S. exports to China increased to the second-highest level on record, led by medical testing equipment and computer chips. At the same time, imports of Chinese products dropped sharply, reflecting lower demand for clothing, textiles and toys.