US goods trade deficit widens sharply in December

US goods trade deficit widens sharply in December

The U.S. goods trade deficit widened sharply in December as slowing global demand and a strong dollar weighed on exports, another sign that economic growth slowed in the fourth quarter.

Shipping containers are stacked on a ship docked at Yusen Terminals at the Port of Los Angeles
Shipping containers are stacked on a ship docked at Yusen Terminals (YTI) on Terminal Island at the Port of Los Angeles in Los Angeles, California, U.S., January 30, 2019. REUTERS/Mike Blake

WASHINGTON: The U.S. goods trade deficit widened sharply in December as slowing global demand and a strong dollar weighed on exports, another sign that economic growth slowed in the fourth quarter.

The Commerce Department said on Wednesday the goods trade gap jumped 12.8 percent to US$79.5 billion in December, also with a boost from an increase in imports. Exports declined 2.8 percent and imports rose 2.4 percent in December.

The Commerce Department also reported retail inventories increased 0.9 percent in December after falling 0.4 percent in the prior month. Retail inventories, excluding motor vehicles and parts, the component that goes into the calculation of gross domestic product rebounded 1.0 percent in December after dropping 0.9 percent in November.

The trade data added to weak December reports on retail sales, housing starts and business spending plans on equipment. It could prompt economists to cut fourth-quarter GDP estimates, currently around a 2.0 percent annualized rate. The government will publish the fourth-quarter GDP report on Thursday. The economy grew at a 3.4 percent pace in the third quarter.

The release of the advance December goods and inventory data was delayed by a five-week partial shutdown of the federal government that ended on Jan 25.

The Commerce Department said it would not be publishing the advance goods trade and inventory data for January and February "to facilitate a faster return to the normal processing and release schedule following the lapse in funding." It will resume the publication of the data with the report for March.

(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)

Source: Reuters

Bookmark