The U.S. trade deficit fell to the lowest level in 16 months in March as imports plunged by the largest amount in five years, the government reported Wednesday, suggesting first-quarter economic growth was stronger than initially estimated. The Commerce Department said the trade deficit fell 13.9 percent to $40.4 billion, the smallest since late 2014. Both imports and exports declined. Imports fell 3.6 percent-the largest percentage drop since early 2009-to $217.1 billion. Imports of goods fell 4.3 percent to $175.3 billion, the smallest since late 2010. Imports of industrial supplies fell to a 12-year low. Petroleum imports fell 4.3 percent to $9.4 billion, the lowest level since mid-2002, even as oil prices rose to an average $27.68 a barrel. Imports from China fell to their lowest level in three years. With exports to China rising sharply, the politically sensitive U.S.-China trade deficit fell 25.7 percent to $20.9 billion in March. Through the first three months of the year, the deficit with China is running 5.4 percent below the same period a year ago. Exports fell 0.9 percent to $176.6 billion. Exports of goods fell 1.6 percent to $116.8 billion. Exports of food and industrial supplies fell to six-year lows, while consumer-goods exports were the lowest in three years. Exports to the European Union increased 9.2 percent, and exports to Canada and Mexico surged 10.9 percent and 6.1 percent, respectively. Exports to China jumped 11.2 percent. The U.S. trade deficit with the European Union surged 31.9 percent to $13.1 billion. The deficit with Mexico increased 8.9 percent to $5.4 billion, and the deficit with Japan increased 25.6 percent to $6.7 billion. So far this year, the trade deficit is running 0.8 percent below the pace during the same period a year earlier. However, economists forecast the deficit will rise further this year as exporters continue to struggle with a weak global economy and the rising value of the U.S. dollar.
