Higher exports soften increase in trade deficit
The U.S. trade deficit shot up nearly 10% to $36.4 billion in November, hitting its highest point since last January, the Department of Commerce said Tuesday.
But even as imports soared, exports also grew -- for the seventh straight month. And some cheered the greater trade activity.
“Today’s numbers are a welcome sign of economic growth and increasing consumer demand,” Commerce Secretary Gary Locke said.
But one economist likened the situation to increasing a credit card balance by $100 a month, eventually leading to poverty.
“The trade deficit is a slow-motion train wreck that will eventually destroy the country,” Dirk van Dijk, chief equity strategist for investment research website Zacks.com, wrote on the website.
The deficit soared 9.7% from October’s $33.2 billion, the Commerce Department said. The trade gap, created when more goods and services are imported than are exported, has been steadily widening since hitting a bottom of $25.8 billion in May.
“As we enter 2010, we are exploring new export opportunities and educating companies on the benefits of incorporating new markets to continue to boost exports and create jobs for Americans,” Locke said.
The weaker dollar and healthier foreign economies helped boost exports 0.9% to $138.2 billion in November, but that gain was swamped by a 2.6% jump in imports to $174.6 billion, pushed by higher oil prices and businesses trying to stabilize inventories.
For now, economists also see the rebound as a promising signal of the economy slowly getting back on its feet. But some worried that the boost may be short-lived.
“Even if it was caused by the wrong reason, the sharp drop in the trade deficit [earlier last year] was one of the few major silver linings of the financial crisis of a year ago,” Van Dijk said.
Imports of industrial supplies and materials climbed $2.1 billion from October to November, while imports of consumer goods grew $1.4 billion and capital goods went up $1.2 billion.
The 245 million barrels of crude oil imported in November was the lowest amount since February 1999, when the U.S. imported 234 million barrels.
Food and beverage and automotive sector imports also were down, but shipments from those two industries increased.
November’s exports of autos and parts rose to $8.6 billion.
Exports of consumer goods tumbled $720 million, and industrial machinery shipments fell roughly $500 million.
The deficit for petroleum increased 11.7% to $19.9 billion in November, and for nonpetroleum products it widened 6.2% to $27.1 billion.
The U.S. trade gap with China, its largest with any country, narrowed 10.8% to $20.2 billion in November. Exports there rose 6.8% to a record $7.3 billion, surpassing the record set the month before.
The deficit with the European Union ballooned 30.5% to $6.4 billion, while the deficit with Mexico jumped 12.8% to $5.1 billion.
The deficit with Canada, meanwhile, plunged 32.1% to $1.4 billion.
