Washington: The US trade deficit widened for a second straight month in November as imports rose to their highest level in more than a year on higher oil prices, suggesting that trade was a significant drag on economic growth in the fourth quarter.
The Commerce Department said yesterday the trade gap increased 6.8 percent to $45.2 billion. October’s trade deficit was revised down slightly to $42.4bn from the previously reported $42.6bn.
Economists polled by Reuters had forecast the trade gap little changed at $42.5bn in November. When adjusted for inflation, the deficit increased to $63.6bn from $60.3bn in October.
Trade contributed 0.85 percentage point to the third quarter’s 3.5 percent annualised rate of increase in gross domestic product. Economists expect trade will slice off more than one percentage point from GDP growth in the fourth quarter.
Despite the drag from trade, growth in the fourth quarter is expected to have been supported by consumer spending, a firming housing market and rising gas and oil well drilling. The Atlanta Federal Reserve is currently forecasting GDP rising at a 2.9 percent rate in the fourth quarter.
Imports of goods and services increased 1.1 percent to $231.1bn in November, the highest level since August 2015.
