For all 2014, the U.S. goods and services deficit increased 6 percent to $505 billion. Exports rose 2.9 percent and imports declined 3.4 percent.<\/p>\n
The December deficit exceeded economists\u2019 forecast average of $38.3 billion compiled by Bloomberg. \u201cWe certainly expected it to widen, but not by nearly as much as it has been,\u201d said Augustine Faucher, vice president of the PNC Financial Services Group.<\/p>\n
Faucher said the widening deficit was mainly caused by the stronger U.S. dollar and \u201cslower growth overseas,\u201d including the soft euro and slower growth in China and other developing economies.<\/p>\n
\u201cPart of what may be going on is the big swing in oil prices,\u201d Faucher said. He suspected that \u201cthe decline in oil prices isn\u2019t quite being captured in the trade numbers yet.\u201d<\/p>\n
[soundcloud height=”80″]https:\/\/soundcloud.com\/edilleports\/augustine-faucher[\/soundcloud]<\/p>\n
Augustine Faucher, vice president of the PNC Financial Services Group, explains the widening U.S. trade deficit.<\/div>\n
Jennifer Lee, chief economist at BMO Capital Markets, said the energy-related products imports were \u201cvery interesting.\u201d At a 16 percent increase from the year before, the imports in this sector were the largest in three years.<\/p>\n
The U.S. deficit with China increased $23.9 billion to $342.6 billion in 2014. Lee pointed out that this is mainly due to the weakening of China\u2019s yuan.<\/p>\n
\u201cThe dollar is getting stronger because of the diverging monetary policy,\u201d Lee said. \u201cBut almost all other major currencies are depreciating against the dollar now, making foreign goods more attractive to U.S. imports. And that is not what we want right now.\u201d<\/p>\n
Scott Brown, chief economist at Raymond James & Associates Inc., said \u201cthere was an unusual narrowing of the deficit in November,\u201d and the wider December number was \u201cnearly a rebound from that.\u201d<\/p>\n
The trade deficit accounted for 2.9 percent of U.S. gross domestic product in 2014, up from 2.8 percent in the year before.<\/p>\n
Photo on top: Strong U.S. dollar continues to fuel trade deficit. (Pixabay)<\/div>\n","protected":false},"excerpt":{"rendered":"
By Lucy Ren The U.S. trade deficit went up 17.1 percent to $46.6 billion in December. Impacted by the strong dollar, exports decreased by 0.8 percent and imports expanded by 2.2 percent, the highest growth since March. For all 2014, the U.S. goods and services deficit increased 6 percent to $505 billion. Exports rose 2.9 […]<\/p>\n","protected":false},"author":29,"featured_media":5477,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,243],"tags":[],"class_list":["post-5453","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2015"],"yoast_head":"\n
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