Trade gap plunged in December on strength of exports
WASHINGTON — In an encouraging sign for the American economy, the trade deficit fell sharply in December as exports grew at a solid pace while imports of oil and many other goods shrank from the prior month, the Commerce Department reported on Friday.
The big drop in the deficit, to $38.5 billion in December from $48.6 billion in November, indicates that the trade picture was not as bleak at year's end as previously thought. And that should push up the fourth-quarter change in gross domestic product into positive territory from the 0.1 percent decline in the government's initial estimate.
For all of 2012, America's trade deficit of goods and services dipped 3.5 percent to $540.4 billion — reversing two straight years of double-digit percentage gains in the deficit.
Exports rose 4.5 percent last year from 2011, with strong increases particularly of cars and auto parts, and capital goods such as airplanes, electronics and engines. Imports grew 3 percent last year, mostly behind shipments of a wide range of capital goods.
What made the big difference, though, was that the United States imported a lot less in commodities: The dollar value of imports of crude oil, natural and liquefied petroleum gases fell by a combined $27 billion from 2011, partly reflecting America's increased production of energy.
Analysts were surprised by the big fall in December's trade deficit; on average, they were expecting the deficit to narrow just a little from November's number, to about $46 billion. Some of the slide in December imports could suggest weakening American consumer demand, said Chris Williamson, chief economist at Markit, a financial information services company.
Still, Williamson noted that with China's exports surging in the past two months and some leading European countries showing signs of a pick-up in trade, the data are “starting to confirm the message from the worldwide business surveys that global economic growth is reviving at the start of 2013, assisted by rising trade flows, with the U.S. acting as an important driver of the revival.”
The trade deficit of goods and services hit a peak of $753.3 billion in 2006, and it fell to $379.2 billion in 2009 when the economy was still in recession, before starting to rise again, Commerce Department figures show.
Last year's narrowing of the trade deficit, to $540.4 billion, was thanks to sharply lower imports of oil. The American deficit in goods trading with OPEC countries fell to $98.9 billion last year from $126.9 billion in 2011. Meanwhile, the U.S. shortfall in trade with China edged higher, to $315 billion from $295.4 billion in 2011, while the deficit with Europe ticked up to $125.9 billion in 2012 from $119.7 billion the previous year.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Alpha Natural Resources buys out European partner in Marcellus venture
- Shareholders approve Heinz, Kraft merger
- Halliburton to close Indiana County office
- U.S. Steel, Alcoa lead June decline
- Obama overtime proposal slammed
- United Airlines announces investment in biofuel supplier Fulcrum BioEnergy
- Data transfer in mergers tall task for chief information officer for Peoples Gas
- Stocks inch up but S&P ends quarter at loss
- Heinz executives to dominate post-merger management of Kraft Heinz Co.
- Consol again reworks offering for coal spinoff
- W.Pa. economy gains momentum as employers increase hiring