January 13, 2012 / 1:37 PM / 7 years ago

November trade gap widens, biggest since June

WASHINGTON (Reuters) - The trade deficit widened in November to its largest in five months, suggesting imports weighed on economic growth a bit more than expected during the fourth quarter.

The trade gap totaled $47.8 billion, exceeding analysts’ forecast of a $45.0 billion deficit, Commerce Department data showed on Friday.

The government revised its initial estimate for October’s trade deficit slightly lower to $43.3 billion.

The trade report “is important for fourth-quarter GDP and this data should bring those (growth) expectations down,” said Jacob Oubina, an economist at RBC Capital markets in New York.

Imports rose 1.3 percent to $225.6 billion as Americans bought more industrial supplies from abroad and spent more on foreign oil. It was the biggest increase in imports since May, according to seasonally adjusted figures.

The average price for imported oil rose to $102.50 per barrel, up 3.7 percent from October, while the volume of oil imports also rose.

However, a separate report from the Labor Department showed a drop in oil prices during December pushed down overall import prices during that month, suggesting the trade gap could get some relief at the end of the year.


Graphic for U.S. import/export prices: link.reuters.com/can95s


Also, November’s data on imports gave some positive signals for the economy. Imports of capital goods, which are used in domestic workplaces, climbed to a record high.

U.S. financial markets showed little reaction to the trade data. Stock futures were weaker, while Treasury debt prices were up as traders focused on developments in Europe.

Trade perennially weighs on U.S. economic growth. A wider deficit shows that more goods and services bought by U.S. businesses and consumers were produced outside the country, subtracting from gross domestic product.

In November, exports fell 0.9 percent to $177.8 billion.

Earlier in his administration, President Barack Obama pledged to double U.S. exports within five years and on Friday he plans to ask Congress for authority to merge the agency that negotiates U.S. trade deals into the Commerce Department.

Just as higher imports might be a sign of increasing consumer demand within the country, the drop in exports might reflect the recent cooling in the global economy.

With the unemployment rate declining and factory output holding strong, U.S. economic growth likely accelerated in the fourth quarter even as the global economy grappled with Europe’s debt crisis, which likely plunged the euro zone into recession at the end of last year.

The report also gave a hint of a modest improvement in the politically charged trade imbalances between the United States and China.

The trade deficit with China narrowed to $26.9 billion in November, with American exports to the Asian giant rising to $9.9 billion, according to figures that are not seasonally adjusted.

U.S. exports to China were the highest since December 2010, while imports fell.

Additional reporting by Glenn Somerville in Washington and Julie Haviv in New York; Editing by Andrea Ricci

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