With the value of imports increasing by slightly more than the value of exports, the Commerce Department released a report on Tuesday showing the U.S. trade deficit widened modestly in the month of December.
The Commerce Department said the trade deficit widened to $80.7 billion in December from a revised $79.3 billion in November. The trade deficit in December was just shy of the record $80.8 billion set in September.
Economists had expected the trade deficit to expand to $83.0 billion from the $80.2 billion originally reported for the previous month.
The wider deficit came as the value of imports surged 1.6 percent to $308.9 billion, while the value of exports jumped 1.5 percent to $228.1 billion.
Notable increases in imports of consumer goods, automotive vehicles, parts and engines, and capital goods more than offset a significant decrease in imports of industrial supplies and materials.
Meanwhile, the report showed increases in exports of consumer goods, capital goods, automotive vehicles, parts and engines were partly offset by a drop in exports of foods, feeds, and beverages.
“The solid gains in both exports and imports in December are a signal that global supply chain problems are easing, although the further widening in the trade deficit suggests that net trade will remain a drag on GDP growth in the first quarter,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.
The Commerce Department also said the goods deficit widened to $101.4 billion in December, while the services surplus increased to $20.7 billion.
For 2021, the goods and services deficit soared $182.4 billion or 27.0 percent from 2020. Exports spiked $394.1 billion or 18.5 percent, while imports skyrocketed $576.5 billion or 20.5 percent.
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