The US trade deficit widened sharply to a record high of $109.8 billion in March of 2022, as a broad-based rise in prices, especially for energy lifted imports by 10.3% to a new record high of $351.5 billion. Oil import prices jumped to $87.2 billion a barrel in March compared to $76.37 in the previous month. Also, sharp increases were seen in purchases of finished metal shapes, crude oil, cotton apparel and household goods, footwear, furniture, computers, passenger cars, transport and travel. Exports also reached a new record of $241.7 billion but increased 5.6%, much less than imports. Shipments rose mainly for crude oil, fuel oil, natural gas liquids, autos and parts, transport and travel. Based on not seasonally adjusted data, the trade deficit with China increased to $34 billion from $30.7 billion in February and with Russia, the gap widened to $2.6 billion from $2.1 billion.
With the exception of fuel, we are still buying at record levels. Whether this, at the consumer level, is with residual COVID largess or with new higher wages, it indicates np hesitancy to buy. While this buying frenzy may increase inflation, if things get too far out of whack, its cessation could be macroeconomically traumatic.