U.S. November Trade Deficit Widens More Than Forecast


The U.S. trade deficit widened more than forecast in November as Americans spent a record amount on imported oil, overshadowing gains in exports.

The gap between imports and exports grew 9.3 percent, the most in two years, to $63.1 billion from $57.8 billion in October, the Commerce Department said today in Washington. The shortfall with China shrank.

A weaker dollar and growing demand from Asia and Latin America also boosted exports to the highest ever, which may prevent U.S. factories from slumping even more. Sales overseas are one of the remaining bright spots as a worsening housing slump and growing unemployment threaten to stall economic growth.

The trade gap was forecast to widen to $59.5 billion, according to the median projection in a Bloomberg News survey of economists. The shortfall was the widest since September 2006.

The dollar remained weaker against the yen after the figures.

Imports rose 3 percent to $205.4 billion, reflecting record purchases of crude oil as the average price shot up to $79.65 a barrel, the highest ever. The jump in petroleum demand accounted for about two-thirds of the increase in the trade gap.

Purchases of capital equipment, such as telecommunications gear and industrial engines, and consumer goods also contributed to the increase in imports.

The increase in purchases of capital and consumer goods suggests gains in inventories and spending may offset some of the drag from the wider trade deficit. Still, today's report may prompt some economists to lower forecasts for U.S. fourth- quarter economic growth.

Exports climbed 0.4 percent to $142.3 billion in November, setting a record for a ninth consecutive month. Overseas sales of automobiles and parts and refined energy products, such as fuel oil, strengthened.

The trade gap with China, the second-largest U.S. trading partner after Canada, decreased to $24 billion from $25.9 billion in the prior month.

A weaker dollar, which makes American-made goods less expensive for overseas buyers, is helping to lift exports. The dollar is down 8 percent against a trade-weighted basket of currencies from the U.S.' biggest trading partners over the last 12 months, based on Federal Reserve data.

 


TradingEconomics.com, Bloomberg
1/11/2008 6:39:38 AM