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The U.S. trade deficit spiked by much more than expected in the month of March, according to a report released by the Commerce Department on Tuesday.
The report said the trade deficit soared to a record high $140.5 billion in March from a revised $123.2 billion in February.
Economists had expected the trade deficit to widen to $129.0 billion from the $122.7 billion originally reported for the previous month.
The much bigger than expected trade deficit came as the value of imports surged by 4.4 percent to $419.0 billion in March after coming in virtually unchanged at $401.2 billion in February.
The sharp increase by the value of imports partly reflected a spike by imports of consumer goods, particularly pharmaceuticals.
Imports of capital goods and automotive vehicles, parts and engines also saw notable growth, while imports of industrial supplies and materials saw a steep drop.
Meanwhile, the report said the value of exports crept up by 0.2 percent to $278.5 billion in March after jumping by 2.8 percent to $278.0 billion in February.
Increases in exports of industrial supplies and materials and automotive vehicles, parts and engines were largely offset by decreases in exports of civilian aircraft and services.
Nationwide Economist Daniel Vielhaber said the data "reiterates that businesses spent Q1 front-loading orders for consumer and capital goods"
"This is likely to reverse in Q2 as a fall in imports due to higher tariffs should lift the net exports component of growth," Vielhaber added. "However, with the new tariffs now in place, we look for a shift up in inflation, adding a headwind to already slowing consumer activity and economic growth."
The Commerce Department also said the goods deficit surged to $163.5 billion in March from $147.0 billion in February, while the services surplus narrowed to $23.0 billion in March from $23.8 billion in February.
