Trade flow numbers released on Tuesday showed a record deficit in March in the US. According to analysts at Wells Fargo, the US economy continues to lead the way in vaccinations, which is fueling a speedier domestic recovery and therefore rebound in imports.

Key Quotes: 

“Trade flows strengthened in March with both exports (+6.6%) and imports (+6.3%) rising at their fastest pace since July. But as the $12.4 billion gain in exports was beat by a $16.4 billion increase in imports, the trade balanced widened further to a record deficit of $74.4 billion.

“The underlying details of the report came in largely as expected. After weather disruptions and supply challenges in February, trade picked up in March.”

“While the goods trade deficit grew by $3.6 billion in March, the services trade surplus also got $0.3 billion smaller. Services trade remains significantly below its pre-virus position as the services economy remains particularly constrained by virus restrictions. 

“As vaccinations gain more momentum abroad and the global recovery gains pace, trade should begin to normalize. Export growth should begin to rival import growth, which will remain supported by a surge in domestic consumer and business demand.”