The US merchandise trade deficit widened in January as imports climbed to record highs, suggesting that demand from US consumers continues to pick up.

Online, released by the Ministry of Commerce on Friday, the trade deficit rose to $83.7 billion from $83.2 billion in December. Economists surveyed by Bloomberg forecast a median deficit of $83 billion. Imports rose 1.1 per cent to $218.9 billion and exports rose 1.4 per cent to $135.2 billion, the highest level since February 2020.

Us imports and exports surged to $354 billion in January, the highest level since October 2018, indicating a rebound in trade activity.

Thursday's report also showed that retail inventories fell 0.6% from December, the first decline since June. Wholesale inventories rose for the second month in a row, up 1.3%.

The final report, including trade in services, will be released on March 5.