America's trade deficit with the rest of the world jumped to a near five-year high in January as cellphones and rising oil prices helped to push up the U.S. import bill.
The U.S. Commerce Department said on Tuesday the trade gap increased 9.6% to $48.5 billion, the highest level since March 2012, but in line with economists forecasts. December's trade shortfall was unrevised at $44.3 billion U.S.
When adjusted for inflation, the trade deficit rose to $65.3 billion from $62.0 billion U.S. in December. The wider trade gap added to weak data such as housing starts, consumer and construction spending in suggesting the economy struggled to regain momentum early in the first quarter after growth slowed to a 1.9%annualized rate in the final three months of 2016.
The economy grew at a 3.5% pace in the third quarter.
Trade cut 1.7 percentage points from gross domestic product in the fourth quarter. Experts are forecasting gross domestic product rising at a 1.8% rate in the first quarter.
The Trump administration is focusing on trade as it seeks 4% annual GDP growth. President Donald Trump has vowed sweeping changes to U.S. trade policy, starting with pulling out of the 12-nation Trans-Pacific Partnership trade pact.
Trump also wants to renegotiate the North American Free Trade Agreement (NAFTA), which was signed in 1994 by the United States, Canada and Mexico.
