WASHINGTON (MarketWatch) � After declining for four straight months, the U.S. trade deficit widened in November, bringing the trade gap up to its highest level since June.
The nation�s trade deficit widened 10.4% in November to $47.8 billion, the Commerce Department said. This is the largest increase since May.
Exports fell 0.9% to $177.8 billion in November, the second straight drop after hitting a record high in September. Imports rose 1.3% to $189.7 billion in November. Imports have been treading water after hitting $226.2 billion in May.
Analysts surveyed by MarketWatch had expected a deficit of $43.6 billion.
ECONOMY AND POLITICSAsia losing appetite to shop
Manufacturing slowdown ahead?
There are signs the manufacturing sector, which has led the economic recovery, is about to take a breather, in large part due to a weak global economy cutting back exports.
�
� U.S. economic calendar
�Global economic calendar
� Columns:Nutting |Delamaide
� Follow @MKTWEconomics
� Election 2012 /conga/story/misc/dc.html221707
The sharp increase in the deficit could cut the government�s estimate of fourth-quarter growth.
A higher deficit subtracts from growth because Americans are buying more foreign goods.
Economists now estimate that the economy grew at a 3.2% annual rate in the fourth quarter, up from a 1.8% growth rate in the third quarter. The government will release its first estimate of fourth-quarter growth later this month.
The trade deficit could become an issue in this year�s presidential election.
Some economists argue that the trade gap is the most significant barrier to job creation in the U.S. economy.
�Every dollar that goes abroad to purchase oil or Chinese consumer goods, and does not return to purchase U.S. exports, is lost domestic demand that could be creating American jobs,� said Peter Morici, an economics professor at the University of Maryland, in a recent article.
On Wednesday, Alan Krueger, President Barack Obama�s chief economist, disputed this argument in a speech to the Center for American Progress, a Washington think-tank. Krueger noted that the U.S. experienced strong growth in the late 1990s despite globalization.
The Obama White House has championed free trade. It pushed Congress to approve three long-stalled free trade agreements with South Korea, Colombia and Panama.
Republican presidential candidate Mitt Romney has promised to take a tougher stance on trade than the Obama administration, including slapping tariffs on Chinese imports if the country does not allow its currency to strengthen.
The U.S. trade deficit in goods with China reached $26.9 billion in November compared with $25.1 billion in the same month last year. The trade gap with China is set to hit a new record high in 2011.
Treasury Secretary Timothy Geithner travelled to China earlier this week to urge government officials to do more to open their country to exports.
The U.S. exported $9.9 billion of goods to China in November, the highest level since December 2010. However, imports from China to the U.S. totaled $36.8 billion in the same month.
November detailsAn increase in foreign oil imports was a big driver in the increase in imports in November.
The value of U.S. crude oil imports rose to $27.3 billion in November from $26.0 billion in October as the average price of a barrel of oil rose to $102.50 from $98.84 in the previous month. This is the first increase in the price of oil in six months.
That�s not likely to be the case for December�s data, however.
The Labor Department separately on Friday reported that imported fuel prices fell by 0.5% in December after a 3.7% jump in November.
Excluding petroleum, the U.S. trade deficit widened 4.7% to $34.8 billion.
No comments:
Post a Comment