Imports Surge Led to Record Trade Gap in 2022

The silhouette of cranes
The silhouette of cranes as they unload container ships at the Port of Los Angeles in San Pedro, Calif. (Patrick T. Fallon/Bloomberg News)

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The U.S. trade deficit widened to a record last year on a surge in imports as American companies scrambled early on to ensure they had enough merchandise on hand to meet demand.

The annual shortfall in goods and services increased 12.2% to $948 billion, Commerce Department data showed Feb. 7. The December gap widened to $67.4 billion from the prior month. The figures aren’t adjusted for prices.

A record value of imports in 2022 reflects in part a push by retailers to replenish inventories well ahead of peak selling periods and avoid a repeat of shortages and supply chain delays that clogged West Coast ports in 2021. A robust job market and pent-up savings from government stimulus programs have helped to keep consumer spending resilient.

The value of imports last year climbed 16.3% from 2021 to nearly $4 trillion, while exports of goods and services rose 17.7% to $3 trillion.

This year, however, global trade is expected to decelerate after central banks aggressively raised interest rates to combat an inflation surge owed in part to strong demand. The International Monetary Fund sees world trade expanding in 2023 at the slowest pace since 2009, excluding the immediate onset of the pandemic. It expects trade to pick up again next year.

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U.S. recession risks have climbed amid tighter policy, including increased odds that household spending will cool. A Gallup poll released Feb. 6 showed Americans are sour on the economy’s prospects, with about four in 10 expecting unemployment to rise.

While U.S. companies and consumers benefited from a strong dollar through much of 2022, which makes foreign-made goods more competitive, it has weakened notably over the past three months.

In December 2022, the value of imports increased to $317.6 billion, while exports dropped to $250.2 billion. The merchandise-trade deficit widened to $90.6 billion, while the nation’s surplus in services trade grew to $23.2 billion.

Travel exports — or spending by visitors to the U.S. — rose to $13.3 billion, and travel imports, a measure of Americans traveling abroad, fell to $10.7 billion.

On an inflation-adjusted basis, the December merchandise-trade deficit widened to $98.6 billion.

With assistance from Ana Monteiro.

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