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US goods trade deficit widens sharply in December

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The US 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.

[WASHINGTON] The US 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 per cent to US$79.5 billion in December, also with a boost from an increase in imports. Exports declined 2.8 per cent and imports rose 2.4 per cent in December.

The Commerce Department also reported retail inventories increased 0.9 per cent in December after falling 0.4 per cent 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 per cent in December after dropping 0.9 per cent 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 per cent annualized rate. The government will publish the fourth-quarter GDP report on Thursday. The economy grew at a 3.4 per cent pace in the third quarter.

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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.

REUTERS