With the value of imports showing a substantial increase, the Commerce Department released a report on Wednesday showing the U.S. trade deficit widened to a new record in the month of March.
The report showed the trade deficit widened to $109.8 billion in March from a revised $89.8 billion in February. Economists had expected the deficit to widen to $107.0 billion from the $89.2 billion originally reported for the previous month.
The wider trade deficit came as the value of imports soared by 10.3 percent to $351.5 billion in March after climbing by 1.6 percent to $318.6 billion in February.
The spike in the value of imports reflected sharp increases in imports of industrial supplies and materials, consumer goods, capital goods and automotive vehicles and parts.
Meanwhile, the report showed the value of exports jumped by 5.6 percent to $241.7 billion in March after rising by 1.9 percent to $228.8 billion in February.
Exports of industrial supplies and materials showed a substantial increase, while exports of automotive vehicles and parts also edged higher.
"We suspect imports will fall back over the coming months, particularly given the lockdowns in China, but net trade will probably remain a drag on GDP growth in the second quarter," said Andrew Hunter, Senior U.S. Economist at Capital Economics.
The report showed the goods deficit widened to $128.1 billion in March from $107.8 in February, while the services surplus edged up to $18.3 billion from $18.0 billion.
