The US trade deficit in goods narrowed to $147.91 billion in February 2025, exceeding market expectations of $134.5 billion and easing from a revised record high of $155.6 billion in the previous month, according to an advance estimate. This marked improvement came as a result of a slight decline in the overall trade imbalance, though the deficit still remained significant.
US goods trade deficit narros from record
Imports surged 22.5% to $326.51 billion, driven primarily by sharp increases in purchases of industrial supplies (+56.1%), consumer goods (+24.3%), and capital goods (+18.1%). The uptick in imports reflects strong demand within the US economy, indicating robust consumer and business activity, despite global economic challenges. Industrial supplies, in particular, saw the largest increase, signaling growing demand for materials, likely linked to ongoing infrastructure projects and manufacturing recovery.
Exports rise by 2.5%
Meanwhile, exports rose 2.5% to $178.6 billion, boosted by higher sales of capital goods (+12.2%) and consumer goods (+4.1%). The increase in capital goods exports, such as machinery and electronics, points to strong global demand for US-made products, while the uptick in consumer goods exports reflects a relatively stable foreign demand for US retail products. Despite this positive export growth, the gap between imports and exports remained large, signaling persistent trade imbalances. While the narrowing deficit could be seen as a step in the right direction, analysts are cautious, noting that the strong rise in imports could signal continued pressure on the US economy to balance demand and trade flows. Moving forward, attention will turn to the impact of any future trade policies, particularly with regard to tariff measures, which could further shape the trajectory of the trade balance.
