Primarily reflecting a steep drop in the value of imports, the Commerce Department released a report on Tuesday showing that the U.S. trade deficit narrowed by more than expected in the month of February.

The Commerce Department said the trade deficit narrowed to $43.6 billion in February from a revised $48.2 billion in January.

Economists had expected the deficit to narrow to $44.8 billion from the $48.5 billion originally reported for the previous month.

The narrower than expected trade deficit came as the value of imports tumbled by 1.8 percent to $236.4 billion in February from $240.7 billion in January.

The report showed notable decreases in imports of automotive vehicles, parts, and engines and cell phones and other household goods.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said the pullback came as a surge in imports from China ahead of the Lunar New Year Holiday was reversed.

On the other hand, the Commerce Department said the value of exports edged up by 0.2 percent to $192.9 billion in February from $192.5 billion in January.

Increases in exports of pharmaceutical preparations and industrial supplies and materials were partly offset by decreases in exports of soybeans and civilian aircraft.

“As things stand now, the monthly data point to a 3.0% annualized gain in real exports in the first quarter and a more modest 2.0% increase in real imports,” Ashworth said.

He added, “As a result, we expect net external demand to make a modest positive contribution to overall GDP growth, which we estimate was around 1.7%.”

The report also said the goods deficit narrowed to $65.0 billion in February from $69.5 billion in January, while the services surplus inched up by less than $0.1 billion to $21.4 billion.

by RTT Staff Writer

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