U.S. trade deficit for goods narrows in December

container spain Jumilla Flickr
Containers at a Spanish port. No changes to the photo was made. (Jumilla/Flickr)

by Jingnan Huo

The U.S. international trade deficit for goods narrowed to $65 billion in December from $65.3 billion in November, seasonally adjusted, according to an advance report released by the U.S. Census Bureau Thursday.

Economists were expecting no change in the deficit.

Exports grew 3 percent to $125.52 billion from $121.85 billion in November, with capital goods such as aircraft jumping by 7.3 percent. Imports grew 1.8 percent to $190.52 billion from $187.15 billion, with automotive vehicle imports rising 5.4 percent. Wholesale trade inventories grew by 1 percent.

export U.S. December 2016 Census
Breakdown of U.S. exports, December 2016. Data from U.S. Census Bureau (Jingnan Huo/MEDILL)
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Breakdown of U.S. import in December 2016. Data from U.S. Census Bureau(Jingnan Huo/MEDILL)

Some economists raised their estimates for fourth-quarter GDP on the better-than-expected result.

“We are expecting the U.S. economy to be doing reasonably well, so [rising imports and exports] add a little bit to our real GDP in the fourth quarter,” said Michael Lewis, president and founder of Free Market Inc., expert at EconVue.

GDP in the fourth quarter is expected to rise 2.2 percent, seasonally adjusted, according to economists surveyed by Bloomberg. The economy grew 3.5 percent in the third quarter of 2016.

Economists will be watching monthly trade balance figures more closely to gauge the impact of the President Donald Trump’s policies.

In his first week in office, Trump tossed out the Trans-Pacific Partnership and has threatened “significant” border taxes, while promising lower corporate taxes and deregulation.

“Besides getting off the TPP, nothing has been finalized yet,” said Moiz Shirazi, Principal Economist at Baker & McKenzie Consulting LLC. Businesses are taking a “wait-and-see approach” to potential new policies, he added.

Photo at top: Container at a Spanish port. (Jumilla/Flickr)