Robust Domestic Demand Lifts U.S. Trade Deficit To Record High

• The U.S. trade deficit jumped to a record high in March amid roaring domestic demand, which is drawing in imports, and the gap could widen further as the nation's economic activity rebounds faster than its global rivals.
• Manufacturers lack the capacity to satisfy the surge in demand because of resource constraints and bottlenecks in the supply chain. Inventories are very lean. Demand is being driven by a rapidly improving public health situation and massive government aid to households and businesses to cushion the blow from the COVID-19 pandemic.
• "The widening of the trade gap will likely be a persistent feature of the economy this year as domestic demand outstrips the U.S. economy's productive capacity," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
• The trade deficit increased 5.6% to an all-time high of $74.4 billion in March, the Commerce Department said on Tuesday. The trade gap was in line with economists' expectations.
• Imports soared 6.3% to a historic $274.5 billion in March. Goods imports shot up 7.0% to $234.4 billion, also an all-time high. Imports of consumer goods were the highest on record, as were those for food and capital goods.

(Source: Reuters)