US trade deficit narrows after jump in exports

[WASHINGTON] The US merchandise-trade deficit narrowed in December as a jump in exports to pre-pandemic levels accompanied a continuing increase in imports, signaling a recovery in global demand for American products.

The deficit shrank to US$82.5 billion from US$85.5 billion in November, according to Commerce Department data released Thursday. Economists in a Bloomberg survey had called for an US$84 billion shortfall in December. Imports rose 1.4 per cent to US$215.9 billion, the highest since October 2018, while exports increased 4.6 per cent to US$133.4 billion, the highest since February.

Overall, the value of US exports plus imports surged to US$349.3 billion, the highest since May 2019, signaling a recovery in trade.

The report Thursday also showed retail inventories advanced 1 per cent from the prior month, the largest increase since September. Wholesale inventories rose 0.1 per cent.

China and the US last January signed the first phase of a trade agreement that's supposed to see the Asian nation buying an extra US$200 billion of American goods within two years, the result of nearly three years of contentious talks that roiled markets.

Amid the disruption of the global pandemic, US exports to China reached only 63 per cent of their 2020 target, the US Census Bureau said in a statement on Wednesday.

BLOOMBERG