The U.S. trade deficit widened to $80.4 billion in November last year, a sharp increase over the previous month, nearing September’s record level of $81.4 billion.
The data from the Census Bureau and the Bureau of Economic Analysis came in below expectations of economists polled by The Wall Street Journal, which had forecast the deficit to reach a record $81.5 billion. October’s trade deficit was $67.2 billion.
The November deficit was fueled by a 4.6% jump of imports, to a total $304.4 billion, as U.S. consumers spending boosted demand for goods in the run-up to the holiday season. Exports of goods declined, with the deficit in the trade of goods increasing by $15.1 billion to $99 billion. Meanwhile, the balance of services surplus rose by $2.1 billion to $18.8 billion, the data shows.
The worsening trade deficit in November means that foreign trade will be a “small drag” on U.S. gross domestic product growth in the last quarter of 2021, Capital Economics analyst Michael Pearce noted.
The November data doesn’t reflect the potential economic impact of the spread of the Omicron variant of the coronavirus, and is partly explained by the lifting of restrictions worldwide. The surge of imports also seems to confirm that supply- chain bottlenecks had begun to ease somewhat in the weeks before Christmas.
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