Trade deficit up 1.9% in January
The level of imported goods to the U.S. in January reached unprecedented levels and pushed the trade deficit 1.9% higher as the coronavirus pandemic continues to distort global commerce.
The gap between the goods and services the United States sold and what it bought abroad rose to $68.2 billion from $67 billion in December, the Commerce Department reported Friday. Exports rose 1% to $191.9 billion, while imports increased 1.2% to $260.2 billion.
Imports of goods, not including services, increased $3.4 billion to a record $221.1 billion in January, led by pharmaceuticals, which rose $5 billion, or 39%, to $17.4 billion. Imports of services fell about 1%.
The figure exceeded the previous record for imported goods of $218.9 billion set in October, 2018.
U.S. exports of goods rose $2.1 billion to $135.7 billion in January, while exports of services, like transport and travel, declined $0.3 billion to $56.3 billion.
The politically sensitive trade gap with China fell 3.2% to $27.2 billion. The trade deficit with Mexico rose $1.6 billion to $11.9 billion in January.
The coronavirus has upended trade in services such as education and travel, sections of the economy in which the United States runs persistent surpluses. Measured in dollars, monthly exports of U.S. services have declined by nearly one-fourth since the virus outbreak about a year ago.
Year-over-year, the goods and services deficit climbed to $23.8 billion, or 53.7%, from January 2020.
Big Tech critic named to White House panel
President Joe Biden on Friday named Tim Wu, a Columbia University law professor, to the National Economic Council as a special assistant to the president for technology and competition policy, putting one of the most outspoken critics of Big Tech's power into the administration.
The appointment of Wu, 48, who is widely supported by progressive Democrats and anti-monopoly groups, suggests the administration plans to take on the size and influence of companies like Amazon, Apple, Facebook and Google, including working with Congress on legislation to strengthen antitrust laws. During his campaign, Biden said he would be open to breaking up tech companies.
Biden has also expressed skepticism toward social media companies and the legal shield known as Section 230 of the Communications Decency Act. He told The New York Times editorial board in January 2020 that Section 230 "should be revoked, immediately."
The tech companies have fought vigorously against new antitrust laws and regulations, building out some of the most potent lobbying forces in Washington to push back.
Wu has warned about the consequences of too much power in the hands of a few companies.
"Extreme economic concentration yields gross inequality and material suffering, feeding the appetite for nationalistic and extremist leadership," Wu wrote in his 2018 book, "The Curse of Bigness: Antitrust in the New Gilded Age."
Consumer borrowing fell during January
Borrowing by Americans fell in January for the first time in five months, as the use of credit cards fell to the lowest level in four years, offsetting gains in auto loans and student loans.
The Federal Reserve reported Friday that consumer borrowing fell by $1.3 billion in January, the first setback since a $9 billion decline in August.
The weakness came from a $9.9 billion decline in borrowing in the category that covers credit cards. It marked the fourth straight decline in that category and was the biggest drop since a $10.8 billion fall in August. It pushed credit card activity down to the lowest level since January 2017.
The category that covers auto and student loans posted an $8.6 billion increase in the first month of 2021, following an even bigger gain of $11.6 billion in December.
Consumer borrowing is closely watched for indications about Americans' willingness to take on more debt to finance their spending, which accounts for two-thirds of U.S. economic activity.
Since the pandemic hit a year ago, millions have lost their jobs and households have grown more cautious, boosting their savings levels as a hedge against economic uncertainty.