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January 5, 2018 10:15 AM, EST

US Trade Deficit Balloons to Widest in Almost Six Years

Tim Rue/Bloomberg News

The U.S. trade deficit in November reached the highest level in almost six years as an increase in imports exceeded a gain in shipments overseas, Commerce Department data showed Jan. 5.

Highlights of November Trade Balance

•Gap grew 3.2% to $50.5 billion (estimated $49.9 billion deficit) from a revised $48.9 billion in the prior month (previous $48.7 billion).

•Imports rose 2.5% to a record $250.7 billion on more inbound shipments of consumer goods and industrial supplies.

•Exports climbed 2.3% to all-time high of $200.2 billion, led by increased shipments of automobiles, consumer merchandise and capital goods including commercial aircraft.

Key Takeaways

The widening trade gap could be a drag on fourth-quarter economic growth, keeping gross domestic product from advancing at least 3% on an annualized basis for a third straight quarter. Net exports added 0.36%age point to the 3.2% gain in third-quarter GDP.

While a weaker dollar and improving global markets are spurring overseas sales of U.S. goods and services, imports are also picking up on the heels of firmer demand from American households and companies.

In November, the unadjusted U.S. merchandise shortfall with China climbed to the highest since September 2015, while the gap with European Union countries was the largest in a year.

Other Details

• After eliminating the effects of price fluctuations, which generates the numbers used to calculate GDP, the trade gap widened to $66.7 billion, the widest since March 2015, from $65.6 billion.

• Imports of capital goods climbed to a record $56.5 billion, while consumer goods totaling $52.4 billion were the most since March 2015.

• Exports of merchandise increased to $134 billion, the highest since November 2014.

• Exports and imports of goods accounted for about three-fourths of America’s total trade in 2016; the U.S. typically runs a deficit in merchandise trade and a surplus in services.