The trade deficit likely narrowed in February due to growth in exports. A consensus survey of 71 estimates show a median trade gap of $44 billion, a 5 percent decrease from January’s $46.3 billion.

One indication that exports were strong in February is in the Institute for Supply Management’s (ISM) national report, which shows that exports for both manufacturing and non-manufacturing industries grew faster by 3.5 percentage points compared to steady growth for imports. The report surveys a sampling from each industry to gauge monthly changes in indicators like growth and inventory.

The ISM report is a good predictor for the trade deficit as long as the value of the dollar stays relatively stable, said Max Clarke, chief U.S. economist for IDEAGlobal. The dollar remained weak in February, which should encourage exports.

Imports are expected to have remained stable after a surprising spike in the previous month. That sudden increase may have been due to Chinese suppliers shipping their goods to the U.S. ahead of the Chinese New Year, a two-week long holiday in February. This rush of imports will have a significant impact since China is America’s second-largest trading partner after Canada, with whom we maintain the largest deficit with any single country.

“But that situation will reverse in February, so we’ll see imports stabilizing or maybe even declining,” said Russell Price, senior economist for Ameriprise Financial Inc.

Donald Ratajczak, consulting economist for Morgan Keegan and Co., disagrees. He believes the Chinese New Year will be accounted for by the seasonal adjustment. “Because it happens at the same time every year,” he said.

Ratajczak expects the deficit to widen to $48.7 billion due to higher imports. “What we’re buying is more expensive than what we’re selling. It’s an obvious one,” he said. “Crop prices and meat prices are moderately up, but oil prices have gone through the roof.”

Spiking oil prices earlier this year have caused worries that the trade deficit will widen in response to a larger oil bill. But petroleum imports had actually declined in February by 3.4 percent to 8.6 million barrels per day, according to the U.S. Energy Information Administration.

“It’s mostly because of bloated inventories,” said Price. “There was just nowhere to put the oil.”

Revised on April 14, 2011.

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