You are here

US trade deficit rises for second straight month

Friday, January 6, 2017 - 22:18

33-40345055 - 28_10_2016 - FILES-US-ECONOMY-GROWTH-INDICATOR.jpg
The US trade deficit widened for a second straight month in November as imports rose to their highest level in more than a year on higher oil prices, suggesting that trade was a significant drag on economic growth in the fourth quarter.

[WASHINGTON] The US trade deficit widened for a second straight month in November as imports rose to their highest level in more than a year on higher oil prices, suggesting that trade was a significant drag on economic growth in the fourth quarter.

The Commerce Department said on Friday the trade gap increased 6.8 per cent to US$45.2 billion. October's trade deficit was revised down slightly to US$42.4 billion from the previously reported US$42.6 billion.

Economists polled by Reuters had forecast the trade gap little changed at US$42.5 billion in November. When adjusted for inflation, the deficit increased to US$63.6 billion from US$60.3 billion in October.

Trade contributed 0.85 percentage point to the third quarter's 3.5 per cent annualised rate of increase in gross domestic product. Economists expect trade will slice off more than one percentage point from GDP growth in the fourth quarter.

sentifi.com

Market voices on:

Despite the drag from trade, growth in the fourth quarter is expected to have been supported by consumer spending, a firming housing market and rising gas and oil well drilling. The Atlanta Federal Reserve is currently forecasting GDP rising at a 2.9 per cent rate in the fourth quarter.

Imports of goods and services increased 1.1 per cent to US$231.1 billion in November, the highest level since August 2015. Part of the increase in the import bill reflects higher oil prices. Inflation-adjusted petroleum imports were the highest since November 2012.

There were also increases in imports of industrial supplies and materials, which rose to their highest level since July 2015.

Imports of goods from China fell 2.7 per cent in November.

Exports slipped 0.2 per cent to US$185.8 billion in November, hurt by shipments of capital goods, which fell to their lowest level since September 2011. Exports remain constrained by relentless US dollar strength.

There were, however, increases in exports of industrial supplies and materials, which hit their highest level since July 2015. Petroleum exports were also the highest since July 2015.

The politically sensitive US-China trade deficit fell two per cent to US$30.5 billion in November.

REUTERS

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom