U.S. trade gap hit $48.7 billion in November
WASHINGTON (AP) - The U.S. trade deficit expanded in November to its widest point in seven months, driven by a surge in imports that outpaced only modest growth in exports.
The Commerce Department said Friday that the trade gap widened 15.8 percent to $48.7 billion in November from October.
Imports grew 3.8 percent to $231.3 billion, led by gains in shipments of cell phones, including Apple's new iPhone.
Exports increased only 1 percent to $182.6 billion. And exports to Europe fell 1.3 percent, further evidence of the prolonged debt crisis that has gripped the region.
A wider trade deficit acts as a drag on U.S. growth. It typically means the U.S. is earning less on overseas sales while spending more on foreign products.
Faster growth in exports helped the U.S. economy grow from July through September at an annual rate of 3.1 percent. Most economists say growth has slowed in the October-December quarter to an annual rate of less than 2 percent, in part because of weaker exports.
Paul Ashworth, chief U.S. economist at Capital Economics, predicts trade trimmed growth by about 0.5 percentage point in the final three months of the year. He expects fourth-quarter growth to be no more than a rate of 1.5 percent.
Through the first 11 months of 2012, the trade deficit is running at an annual rate of $546.6 billion. That's roughly 2.4 percent lower than the 2011 deficit.
Imports of consumer goods grew to $45.3 billion in November, a monthly record. Much of the growth was from cell phones and other household electronics products.
Oil imports dropped 2.5 percent, reflecting a fall in prices and lower volume.
Imports of foreign-made autos and auto parts rose a sizable $1.5 billion to $25.6 billion November, likely reflecting catch-up shipments following port disruptions in October caused by Superstorm Sandy.
The U.S. trade deficit with China, the largest with any country, totaled $29 billion in November. That's down slightly from the monthly record of $29.5 billion in October. But the trade gap with China is still on track to set a new annual record in 2012.
Trade was a modest positive for overall economic growth in 2012 and many economists believe that trend will continue in 2013. However, that forecast is based on a view that the European debt crisis stabilizes and growth in Asia begins to rebound.
In its latest outlook, a forecasting panel for the National Association for Business Economics predicted that the U.S. trade deficit for 2013 will total $533 billion, a slight improvement from the $540 billion deficit they expect when the trade numbers are totaled up for all of 2012. That expectation for a slight improvement is based on a view that export growth will outpace imports in 2013.
The Commerce Department said Friday that the trade gap widened 15.8 percent to $48.7 billion in November from October.
Imports grew 3.8 percent to $231.3 billion, led by gains in shipments of cell phones, including Apple's new iPhone.
Exports increased only 1 percent to $182.6 billion. And exports to Europe fell 1.3 percent, further evidence of the prolonged debt crisis that has gripped the region.
A wider trade deficit acts as a drag on U.S. growth. It typically means the U.S. is earning less on overseas sales while spending more on foreign products.
Faster growth in exports helped the U.S. economy grow from July through September at an annual rate of 3.1 percent. Most economists say growth has slowed in the October-December quarter to an annual rate of less than 2 percent, in part because of weaker exports.
Paul Ashworth, chief U.S. economist at Capital Economics, predicts trade trimmed growth by about 0.5 percentage point in the final three months of the year. He expects fourth-quarter growth to be no more than a rate of 1.5 percent.
Through the first 11 months of 2012, the trade deficit is running at an annual rate of $546.6 billion. That's roughly 2.4 percent lower than the 2011 deficit.
Imports of consumer goods grew to $45.3 billion in November, a monthly record. Much of the growth was from cell phones and other household electronics products.
Oil imports dropped 2.5 percent, reflecting a fall in prices and lower volume.
Imports of foreign-made autos and auto parts rose a sizable $1.5 billion to $25.6 billion November, likely reflecting catch-up shipments following port disruptions in October caused by Superstorm Sandy.
The U.S. trade deficit with China, the largest with any country, totaled $29 billion in November. That's down slightly from the monthly record of $29.5 billion in October. But the trade gap with China is still on track to set a new annual record in 2012.
Trade was a modest positive for overall economic growth in 2012 and many economists believe that trend will continue in 2013. However, that forecast is based on a view that the European debt crisis stabilizes and growth in Asia begins to rebound.
In its latest outlook, a forecasting panel for the National Association for Business Economics predicted that the U.S. trade deficit for 2013 will total $533 billion, a slight improvement from the $540 billion deficit they expect when the trade numbers are totaled up for all of 2012. That expectation for a slight improvement is based on a view that export growth will outpace imports in 2013.
Again, this is another example of the failure of free trade agreements. When you hear about the US having a trade deficit, you think that it is foreign goods made by foreign companies being imported by the US. But in reality, many companies, including Apple computing, have shipped their manufacturing off to third world or impoverished nations so that their goods can be manufactured using essentially slave labor. Apple does not manufacture its Iphone or Ipads in the US. They are manufactured overseas by non-American labor. For instance, Foxconn manufactures Iphones. They have been cited for treating their employees like slaves. A worker in Foxconn makes about $350 per month for a 60 hour week (just recently reduced from 80 hour weeks). Each Iphone only costs Apple $8.00 in manufacturing wages. The profit on an Iphone averages about 68 percent.(information provided by 'The Street'). US workers get nothing from this. When you consider the fact the much of US manufacturing has gone overseas (thanks to free trade agreements), the only thing left in the US is service jobs. When these agreements were passed, our government(both Democrats and Republicans) promised that the manufacturing jobs that were lost would be replaced by high paying service jobs in the US. But these service jobs turned out to be McJobs.
If you don't believe this, they look at recent free trade agreements made by the US. For instance, the Dominican Republic - Central America free trade agreements include countries such as Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic; 2005. These countries are too poor to import much from the US. A free trade agreement with these countries is designed to allow US manufacturers to export US job to these countries.