WASHINGTON -- The U.S. trade deficit fell sharply in March to $4.05 billion, which is 26.5 percent lower than the previous month and the smallest monthly gap since June 1983, the Commerce Department reported yesterday.
Imports of foreign-made goods fell 2.7 percent, to $38.04 billion, the lowest monthly total since January 1989. Exports of U.S.-made goods rose 1.2 percent, to $33.99 billion, a total exceeded only twice, in January and October.
While the shrinking U.S. trade gap is unquestionably good news, analysts said, imports fell largely because the recession cut consumer spending, and imports will probably rise again as the recession ends.
More cheering is March's evidence that U.S. exports are still ris
ing, which shows that U.S. industry is increasingly competitive, analysts said. But they warned that a spreading economic slowdown abroad soon may curb export growth.
"It's a good news-bad news thing. Obviously, any time the trade deficit is down, it's good, but when you look at the sources of it, you have to conclude that to a great extent it's temporary," said Lawrence Chimerine, a consultant affiliated with the Economic Strategy Institute in Washington.
"Long-term, I think, there are reasons to be concerned. U.S. competitiveness still needs improvements in many areas," Mr. Chimerine added.
In March, recession-squeezed Americans cut spending on such imports as industrial supplies by $700 million; on consumer goods by $400 million; and on capital goods by $100 million, according to the Commerce Department report.
Meanwhile, Americans boosted sales abroad of U.S.-made airplanes and related parts by $765 million; of electrical machinery by $312 million; of vehicles and related parts by almost $300 million; and of telecommunications equipment by $173 million.
"Exports contributed strongly" to March's improved trade deficit, emphasized Stephen Cooney, director of international investment and finance for the National Association of Manufacturers. "About one-third of the seasonal improvement was due to increased exports. . . .
"We think this reflects the strong competitive position of U.S. industry, where exports are continuing to grow despite the slowdown in world growth. That gives us hope for exports to lead us out of the recession," Mr. Cooney said.