Trade deficit widens as exports fall

The Commerce Department said on Thursday the trade gap increased 7.7 percent to $42.3 billion, the largest since September last year. January's shortfall was revised to $39.3 billion from a previously reported $39.1 billion.

Economists polled by Reuters had forecast the trade deficit falling to $38.5 billion. In addition to weak exports, February's rise in the deficit likely reflected an increase in the price of crude oil.

Declining petroleum imports as a domestic energy production boom reduces the nation's dependency on foreign oil have helped to shrink the trade deficit. That saw the current account deficit hitting a 14-year low in the fourth quarter of 2013.

Trade was one of the key drivers of economic growth during the last three months of last year, a trend that is unlikely to be repeated in the first quarter.

Growth in the first three months of 2014 is expected to have slowed to an annualized pace below 2 percent. The economy grew at a 2.6 percent rate in the fourth quarter.

When adjusted for inflation, the trade gap widened to $50.1 billion in February from $48.5 billion the prior month.

Exports slipped 1.1 percent to $190.4 billion in February. That was the lowest level since September. Imports edged up 0.4 percent to $232.7 billion.

Exports to China fell 4.6 percent in February. Imports from that country tumbled 19.5 percent, narrowing the politically sensitive U.S. trade deficit with the world's second-largest economy to its smallest since March 2013.

The drop in imports was probably due to the Chinese New Year holiday.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)