- POSTED: 06 Feb 2014 21:55
- UPDATED: 07 Feb 2014 01:15
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The US trade deficit widened sharply in December as exports slumped, pointing to a sluggish global economy, government data released on Thursday showed.
WASHINGTON: The US trade deficit widened sharply in December as exports slumped, pointing to a sluggish global economy, government data released on Thursday showed.
The trade deficit rose 12 percent to $38.7 billion in December, from November's upwardly revised $34.6 billion level, the Commerce Department said.
The December shortfall came in well above the average analyst estimate of $36.0 billion.
Exports tumbled 1.8 percent in December, to $191.3 billion, and imports edged up 0.3 percent, to $230.0 billion.
The trade report highlights the fragile nature of the global economic recovery, said Tu Packard of Moody's Analytics.
"Foreign demand for US goods does not yet show a firm trend while the US domestic economy is hardly displaying much vigor," Packard said.
The trade report came amid signs of a slowdown in emerging-market economies and the Federal Reserve's launch in December of a reduction in its massive stimulus for the US economy.
"The import story remains the same. Imports of petroleum products are declining while imports of other things are slowly rising," said Patrick Newport at IHS Global Insight.
The December decline in exports was entirely due to a fall in exports of goods, led by industrial supplies and materials and capital goods. That overshadowed record oil exports of $13.5 billion and food exports of $12.8 billion.
Imports of both goods and services increased a bit, notably in consumer goods, which hit a record $45.7 billion, and travel services.
Jennifer Lee, senior economist at BMO Capital Markets, said the latest trade data suggested that a "meaningful" downgrade of fourth-quarter growth in the world's largest economy was likely.
The government's first estimate was an annual rate of 3.2 percent for the October-December period. "It wouldn't be surprising to see growth come in below 3.0 percent for the quarter," she said.
For all of 2013, the United States had the smallest deficit since 2009, at $471.5 billion, down 11.8 percent from 2012.
Last year's trade deficit reflected a record services surplus of $231.6 billion.
Exports rose 2.8 percent to $2.3 trillion. Exports of goods rose 1.9 percent to a record $1.6 trillion.
The United States set new records for exports of food, industrial supplies, capital goods, autos and consumer goods. Petroleum exports reached $137.0 billion, the highest on record.
Imports of goods fell for the first time since 2009, with oil imports notably the lowest since 2010.
The country, benefiting from a boom in oil production, imported 2.8 billion barrels of crude, the smallest amount since 1995.
US goods exports to the 20 economies that have trade agreements with the United States reached a record $732.0 billion.
"Despite the setback in December, the trend in foreign trade is positive. Trade contributed to growth in 2013 and will again in 2014," said Jay Morelock of FTN Financial.
The trade gap widened in December with North American trade partners Canada and Mexico, the European Union and Japan.
The chronic deficit with China, the nation's second-largest trading partner, shrank almost nine percent to $24.5 billion for December.
But for the full year, the gap with China hit a new high at $318.4 billion, up from $315.1 billion in 2012.