Political | Process

Imports leaped 10.3% in March to a record $351.5 billion. High inflation, especially oil prices, has added to the cost of imports.

Exports rose 5.6% to $241.7 billion, also a record.

Big picture: The U.S. has repeatedly set record trade deficits during the pandemic. Because the U.S. has recovered faster than other countries, Americans can afford to buy more imports and they are gobbling them up.

Yet trade deficits subtract from gross domestic product, the official scorecard for the economy. GDP contracted by 1.4% in the first quarter mostly because of the huge trade gap.

The U.S. has run large trade deficits for years, but it’s had little effect on the broader economy. By most other measures, the U.S. is still expanding at a steady pace.

Key details: U.S. imports topped $300 billion last fall and have now exceeded that benchmark for five months in a row.

The U.S. in March imported more oil, autos and consumer goods such as cell phones, clothes, furniture, toys and computers.

The sharp increase in imports since last fall also partly reflects American ports more quickly unloading a record backlog of cargo ships waiting offshore.

Exports of petroleum products, crude oil, fuel oil and natural gas rose in March, as did autos and parts. Rising exports are being propelled by higher prices for oil.

U.S. exports have rebounded more slowly than imports during the pandemic, but they’ve also risen to record highs.

Looking ahead: “The prevailing domestic and overseas economic environment could keep the deficit pinned near record levels and impose a significant headwind to U.S. GDP growth,” said U.S. economist Mahir Rasheed of Oxford Economics.

Market reaction: The Dow Jones Industrial Average DJIA, 0.08% and S&P 500 SPX, -0.36% were set to open higher in Wednesday trades.

An advanced look at the trade deficit that only includes goods alerted Wall Street last week to the big increase in March. The full report also includes services such as tourism and entertainment.