The U.S. merchandise-trade deficit widened unexpectedly to a new record in March as the value of imports dwarfed that of outbound shipments, reflecting a surge in inflation.

The shortfall grew almost 18% to $125.3 billion last month, Commerce Department data showed Wednesday. The figures, which aren’t adjusted for inflation, far exceeded all estimates in a Bloomberg survey of economists.

The data will be used to fine-tune forecasts of first quarter gross domestic product before the government’s initial estimate is published Thursday. The ballooning trade deficit during the period is a key reason behind economists’ projections for a slowdown in economic growth during the period from the end of 2021.

An improvement in the trade shortfall any time soon will be difficult as U.S. demand outpaces economic activity in many other countries around the world. Severe lockdowns by the Chinese government in an attempt to contain the coronavirus also muddies the near-term trade picture. The measures have crippled activity at ports and further strained already-tenuous global supply chains.

U.S. merchandise imports grew 11.5% to a record $294.6 billion, reflecting a surge in the value of industrial supplies that include petroleum. Energy prices rallied in the month after Russia’s invasion of Ukraine.

However, the gains were broad-based as the report showed double-digit increases in inbound shipments of consumer goods and automobiles.

Exports increased 7.2% to $169.3 billion in March, also a record and driven by a jump in shipments of industrial supplies.

The Commerce Department’s report also showed wholesale inventories rose 2.3% in March, while stockpiles at retailers climbed 2%.

More complete March trade figures that include the balance on services will be released on May 4.

-With assistance from Kristy Scheuble.

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