The U.S. trade deficit surged to a record high in February as the nation’s economic activity rebounded more quickly than that of its global rivals and could remain elevated this year, with massive fiscal stimulus expected to spur the fastest growth in nearly four decades.
The economy is roaring as increased COVID-19 vaccinations and the White House’s $1.9 trillion pandemic rescue package boost domestic demand, a chunk of which is being satiated with imports. President Joe Biden last week proposed a $2 trillion infrastructure plan, expected to pull in even more imports and fire up economic growth.
“The deficit could remain wide this year and next because of the fiscal stimulus and potential infrastructure package that could pass in the second half of this year,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “As the economy continues to strengthen, this will keep the deficit wide.”