Bad news for a struggling economy is that the U.S. trade gap unexpectedly widened in November. Eric Morath and Ian Talley have reported today, Jan. 11, 2013, for The Wall Street Journal, U.S. Trade Deficit Widens. The U.S. trade gap is reported to have widened in November as imports of smart phones, such as Apple Inc.'s iPhone, surged, therefore helping to offset shrinking demand for foreign petroleum.
The Commerce Department said on Friday that the U.S. deficit in international trade of goods and services increased 15.8 percent to $48.73 billion from a revised $42.06 billion the prior month. Economists who were surveyed by Dow Jones Newswires had expected the gap to decrease to $41.2 billion. U.S. imports increased 3.8 percent to $231.28 billion, with increased shipments of cell phones and related goods alone accounting for a fifth of this overall gain. Imports of cars and drugs also increased steadily in November, helping to drive the trade deficit excluding petroleum transactions to its highest level since September 2007.
Don Lee has also reported on the widened trade deficit for The Chicago Tribune, U.S. trade deficit jumps to seven-month high. An immediate implication of the unexpectedly large widening of the trade deficit, to a seven-month high of $48.7 billion, is that the U.S. economic growth rate for last year's fourth quarter is now likely to be marked lower, probably closer to just a 1 percent annual rate. One good point about the latest trade report is that the increase in imports of consumer products, such as cellphones, pharmaceuticals, diamonds, and clothes, may indicate stronger demand and spending by Americans. And, although some of the imports, which include such things as Apple iPhones and iPads, are assembled in China, their value is largely retained in the U.S.