U.S. Trade Deficit Widens In December As Exports Fall

By Lucia Mutikani | Feb 06, 2014 09:12 AM EST

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The U.S. trade deficit widened more than expected in December as exports fell, which could see the advance fourth-quarter growth estimate trimmed.

The Commerce Department said on Thursday the trade gap increased 12 percent to $38.7 billion. November's shortfall on the trade balance was revised to $34.6 billion from the previously reported $34.3 billion.

Economists polled by Reuters had forecast the trade deficit widening to $36.0 billion in December. For all of 2013, the trade deficit was $471.5 billion, the smallest since 2009.

When adjusted for inflation, the trade gap rose to $49.5 billion in December from $45.0 billion the prior month.

This measure goes into the calculation of gross domestic product. The government in its advance fourth-quarter GDP estimate last week cited trade as one of the key contributors to the economy's 3.2 percent annual growth pace during the period.

Trade added 1.33 percentage points to fourth-quarter GDP growth as exports expanded at their quickest pace in three years and imports slowed.

There are, however, doubts that the robust export growth pace can be sustained in light of slowing growth in markets like China. December's fall in exports could bolster that view.

In addition, strengthening domestic consumer demand could draw in more imports. That has led economists to anticipate some slowing in economic growth in the first quarter.

In December, exports dropped 1.8 percent to $191.3 billion. However, petroleum exports hit a record high in December.

Imports edged up 0.3 percent to $230.0 billion in December. Imports of consumer goods hit a record high, but the impact was limited by a fall in the average price of imported crude oil, which hit its lowest level since February 2011.

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