Trade Deficit Shrinks Handily in February

It appears that oil imports account for that big drop in the trade deficit. Oil imports appeared to be at a decade low and the higher exports of energy helped bridge the gap elsewhere.

Today’s report came from the Commerce Department, and there are two reasons that this does not move the needle much. Well, three reasons. First is that the numbers have a big lag as the data is two months old. Second is that trade deficits have persisted for what is now becoming most of our lifetimes. The last reason that today’s report will not matter very much is that the markets are glued to the super-weak payrolls data, as the payrolls grew by only about half of what economists were predicting.