December trade gap widens to $61.2 billion
U.S. deficit sets record in 2006 despite progress in fourth quarter
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WASHINGTON (MarketWatch) -- The nation's trade deficit widened in December and swelled to a new annual record, a government report showed Tuesday.
The nation's trade gap widened by 5.3% in December, reaching $61.2 billion, the Commerce Department said. See full report.
Analysts surveyed by MarketWatch had expected the deficit to increase to $59.5 billion. See Economic Calendar.
The Commerce Department also cut slightly its estimate of the trade deficit slightly for November, to $58.1 billion from $58.2 billion previously. This was the lowest trade deficit since July 2005.
Economists expect fourth-quarter growth in U.S. gross domestic product to be revised lower to about 2.5% from the initial estimate of 3.5% based on other data for December.
The wider trade gap could add slightly to the downward revision. In the initial estimate, the improvement in foreign trade added 1.6 percentage points to growth in the fourth quarter
The higher deficit in December ends a string of three months of narrower deficits, which economists say was mainly caused by lower prices for imported oil.
Despite the improvement in September through November, for all of 2006, the U.S. trade deficit amounted to a record $763.6 billion, wider by 6.5% from 2005.
But in a sign that the trade gap could be stabilizing, the deficit accounted for 5.8% of GDP in 2006, the same percentage as in 2005.
Another sign of improvement was that exports rose faster than imports in 2006, the first time this has happened since 1997.
The trade gap with China rose to a record $232.5 billion last year, up from $201.5 billion in 2005. The U.S. also set record trade deficits with Japan and Mexico in 2006.
Handful of records fall in December
In December, imports rose faster than exports. As economists had forecast, imports of petroleum products rose sharply and exports of civilian aircraft declined.
Imports increased 2.1%, reaching $186.7 billion. December exports rose 0.6% to $125.5 billion.
Imports of goods alone rose 3.8% to $186.7 billion.
The U.S. imported a record amount of automobiles and auto parts and consumer goods.
Monthly exports of goods alone nose 0.4% higher to $89.4 billion, with the U.S. exporting a record amount of consumer goods.
The petroleum deficit widened 10.5% to a $20.7 billion in December.
The value of U.S. oil imports rose to $15.8 billion in December from $15.6 billion in November as the price of a barrel of oil rose to $53.84 from $52.25. The quantity of crude imports fell to 9.5 million barrels from 10.0 million in the previous month.
The deficit with China widened to $19.0 billion in December from $16.2 billion in the same month last year. The countries' trade gap stood at $22.9 billion in November.
Greg Robb is a senior reporter for MarketWatch in Washington.
