Trade Deficit in U.S. Probably Widened as Imports Increased to Meet Demand

(Bloomberg – Bob Willis)
The U.S. trade deficit probably widened in December for the first time in four months as the cost of imported oil climbed, economists said before a report this week.

The gap grew to $40.2 billion from the $38.3 billion shortfall in November, according to the median of 58 estimates in a Bloomberg News survey ahead of the Commerce Department’s Feb. 11 report. Other figures may show consumer confidence climbed this month and claims for jobless benefits fell.

In addition to oil, imports may have also been boosted by the need to rebuild inventories at the end of the year after American consumers spent at a faster clip in the fourth quarter. At the same time, manufacturers like Caterpillar Inc. are enjoying sales gains overseas as demand picks up from customers in emerging economies, including China and Brazil.

“In order to rebuild inventories of consumer goods, you would expect to see stronger import growth,” said Jay Bryson, a global economist at Wells Fargo Securities Inc. in Charlotte, North Carolina. “Export growth remains pretty strong as most trading partners are experiencing solid rates of growth.” Read more here.