A -1.3% drop in exports in January drove the trade deficit up $2.6 billion (5%) to $56.6 billion, the largest gap since 2008 and an increase of 16% compared to January 2017. The decrease in exports included drops for civilian aircraft (-$1.8 billion), fuel oil (-$0.5 billion), and crude oil (-$0.2 billion), and was offset somewhat by increases for collectibles (+$0.5 billion), pharmaceutical preparations (+$0.4 billion), and services (+$0.3 billion). Imports were unchanged, with drops for cell phones and other household goods (-$1.2 billion), civilian aircraft (-$0.9 billion), and semiconductors (-$0.5 billion) being offset by gains for crude oil (+$2.2 billion) and services (+$0.2 billion). In 2017 Q4, trade deficits increased with China (+$7.4 billion to $89.4 billion) and the European Union (+$4.5 billion to 29.0 billion), but decreased with Japan (-$0.9 billion to $13.9 billion).

The Federal Reserve’s February 2018 Beige Book summary of economic activity noted expansion at a modest to moderate pace. Half the Federal Reserve districts reported increased non-auto sales, and all districts reported flat or declining auto sales. Home sales and construction grew at a modest rate, despite construction being constrained by labor and material shortages, and increases in building material costs fueled by increased demand. Brisk demand for qualified workers and increased activity at staffing placement services accompanied rising wages and increased benefit packages, with shortages often mentioned for workers in construction, information technology and manufacturing. Inflation was moderate, with four districts seeing an increase in steel prices, partially due to a decline in foreign competition, and several districts reporting increases in transportation costs due primarily to higher fuel rates.

A more than expected 313,000 jobs were created in February, and the number of new jobs created in December and January were revised upwards by +15,000 and +39,000 respectively. However, the unemployment rate was unchanged at 4.1% due to an increase in the labor force participation to 63.0% (+0.3%). Employment increased notably for construction (+61,000), retail trade (+50,000), professional and business services (+50,000), manufacturing (+31,000), financial activity (+28,000), mining (+9,000) and healthcare (+19,000). While the average number of hours worked increased by +0.1 to 34.5 hours/week, wages were up +0.1% compared to +0.3% in January, dropping the yearly gain in wages to +2.6% compared to January's +2.8% yearly gain. The more comprehensive U6 measure of unemployment plus labor underutilization remained steady at 8.2%.