US trade deficit in January falls 8.3 pct to $41.8 billion

A container is loaded at the Port of Baltimore.
Andrew Harrer | Bloomberg | Getty Images
A container is loaded at the Port of Baltimore.

The U.S. trade deficit in January dropped sharply as both exports and imports fell.

The Commerce Department says the deficit fell 8.3 percent to $41.8 billion in January, down from $45.6 billion in December. The shrinking trade gap reflected a drop in exports, which fell $5.6 billion to $189.4 billion. Imports fell $9.4 billion to $231.1 billion.

Much of the dip in imports likely came from lower oil prices and a labor dispute that disrupted shipping at West Coast ports. At the same time, the strong dollar that has made American-made goods less affordable abroad is weighing down exports.

Economists expect the deficit to widen further in 2015 as stable growth in the United States drives imports and tepid growth overseas paired with a strong dollar depress exports.