Thursday, February 6, 2014

Trade Gap Widened 12% in December on Soft Exports

The U.S. trade deficit grew to $38.7 billion in December, widening more than forecast. The decline was driven by exports, which ended the year on a soft note. December’s widening offsets a sharp narrowing seen in November, and brings the gap back to the average seen over the four prior months.

Exports – which had been strong in 2013 – were weak in December, with an overall decline of 1.8%. This decline was broad based, with consumer goods, food, industrial supplies, and capital goods all declining. Imports rose slightly as well, gaining 0.3%. The goods deficit rose 10% in December, reaching $49.5 billion.

U.S. petroleum exports climbed to a record level in December, finishing out their strongest year on record. Domestic oil production in the U.S. surged in 2013 and looks to remain strong in 2014. However imports of petroleum products also grew in December, a trend that is likely to continue as the U.S. economy accelerates. Despite this, energy exports are likely to contribute to narrowing the trade gap in the coming year.

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