US DATA: Even Gold Aside, Trade Deficits Were Wide Through February

The US trade deficit remained unusually wide in February at $122.7B (after $130.7B prior, downwardly revised from $131.4B). That was slightly smaller than expected ($123.5B survey), though the difference was accounted for by the January revision.

• Goods exports picked up 4.8% M/M  with services declining 0.4% (first fall since June 2024), while goods imports dipped 0.2% (after +12.3% in January), with services imports growth steady at 0.7%.
• We'll take a closer look at the gold import impact in a separate note but the data for "finished metal shapes" suggests gold imports remained high at $31.7B - a major contributor to the overall deficit - albeit a small dip from $34.2B in January.
• As such it remains trickier to assess the dynamics of the "underlying" trade deficit, but we know the $253B goods and services deficit through the first two months of the year is easily a record for such a span in nominal terms. Without the rise in gold imports, the deficit would probably have been under $200B - but still elevated (vs a 2-month average $150B over 2024).
• Goods imports outside of the "industrial supplies and materials" haven't really picked up much in nominal terms early 2025, not even automobiles (still running around $37-38B monthly), though consumer goods show signs of tariff front-running ($80.7B February deficit, a single-month record, after $78.3B in January), and the overall goods import rises in real terms have been strong vs weak exports.
• In terms of GDP, the 3month moving average of the trade deficit has risen to around 4.7% of GDP, a post-2008 high and up from 2.9% a year earlier. The goods deficit is running at 5.7% of GDP the last 3 months, well up from 4.2% in November, with Services continuing to run its long-standing 1.0% of GDP surplus.
• And from a tariffs perspective, the biggest bilateral goods trade balance deterioration appears gold-related (eg deficit with Switzerland of 0.7% of US GDP over the last 3 months, vs a longer-term average of 0.1%).
• The 12-month rolling goods trade deficits with Canada (0.2% of GDP), Mexico (0.6%), the EU (0.8%), and China (1.0%) are all fairly steady over the last few months, though have gotten slightly larger since the start of 2024.