Imports Rose in February, Building Hope for Recovery

(Javier Hernandez — New York Times)

Trade data on Tuesday provided another piece of evidence that spending by consumers and businesses was picking up, bolstering hopes that the recovery was gaining momentum.

The Commerce Department’s monthly report on trade showed a 1.7 percent increase in imports. Exports barely rose, leading the trade deficit to increase 7.4 percent from January, to $39.7 billion, more than forecast.

The surge in imports, while reflecting a healthy pickup in spending, may be a drag on economic expansion in the short term. That is because the government subtracts imports when it calculates gross domestic product, the total value of goods and services in the economy. […]

Much of the growth in imports came from consumer goods, like televisions and pharmaceutical products, as the jobs market improved slightly and Americans began to spend more.

Businesses imported goods to restock inventories and replace aging equipment. Industrial supplies and capital goods, like machinery and tools, bolstered much of the growth. Read more here.