Goods trade deficit narrows in February; inventories rise

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Shipping containers are seen at the Port Newark Container Terminal near New York City July 2, 2009. REUTERS/Mike Segar (Copyright Reuters 2017)

The U.S. goods trade deficit narrowed sharply in February, and inventories increased, which could prompt economists to raise their estimates for first-quarter gross domestic product.

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The Commerce Department said in its advance economic indicators report on Tuesday that the goods deficit fell 5.9 percent to $64.8 billion last month as a decline imports outpaced a drop in exports.

The weakness in imports is in line with a recent moderation in consumer spending. The government also said inventories at retailers increased 0.4 percent last month to $616.1 billion, and stocks at wholesalers rose 0.4 percent to $594.1 billion.

The Atlanta Federal Reserve is forecasting GDP will show a 1.0 percent annualized expansion rate in the first quarter. The economy grew at a 1.9 percent pace in the fourth quarter.

(Reporting by Lucia Mutikani; Editing by Lisa Von Ahn)