The rise in imports shows the U.S. economy is outperforming the rest of the world.

The U.S. trade deficit rose in March to a record $74.4 billion, driven by demand from American consumers for goods and services from overseas, the Commerce Department reported on Tuesday.

The deficit with China increased $6.7 billion to $36.9 billion in March, while the gap with Mexico increased $1.6 billion to $8.4 billion in March. The deficit with the European Union decreased $2.1 billion to $16.9 billion.

Overall, imports increased 6.3% to $274.5 billion, driven mainly by shipments of consumer goods like toys, furniture, phones and vehicles. Exports also increased, by 6.6%, to $200 billion. Industrial and capital goods led the increase.

The deficit figure was in line with expectations of economists.

As the global coronavirus pandemic eases and countries bring back their economies, the strength of the U.S. recovery is raising demand for goods and services beyond what domestic producers can currently meet. That leads to a rise in imports. The rise in exports also reflects the growing strength of other economies around the world.

In some ways, the increased deficit may actually be seen as a good thing as it suggests there are buyers in many countries looking for more goods and services. Given current supply chain, hiccups are also having an effect as companies seek to source their products from other countries.

Economists are forecasting a strong global recovery from the COVID-19 pandemic as vaccinations reach critical levels and restrictions on business and other establishments are loosened.

The U.S. economy expanded at a 6.4% clip in the first quarter, following a 4.3% rise in the fourth quarter of last year. Employment, meanwhile, continues to rebound, with 916,000 jobs added in March. Friday will bring the April jobs report, with economists expecting another strong increase.