February 10, 2023

Declining global demand and falling crude oil prices caused the U.S. trade deficit to widen in December, undoing half of the previous month’s dramatic decline. Imports increased while exports of products fell to a 10-month low.

The analysis from the Department of Commerce also indicated that the trade deficit would increase to a record level in 2022. Economists predicted that trade, which had supported GDP growth for three consecutive quarters, would likely not assist the economy this quarter as the deficit was forecast to rise once more in January.

FWDBONDS’ chief economist, Christopher Rupkey, stated that “the trade winds have changed and are no longer blowing as powerfully in the favor of positive economic growth.” “The economy isn’t sputtering, but given today’s trade deficit figures, it is unlikely to gain up much momentum.”

To $67.4 billion, the trade imbalance widened by 10.5%. In November, the trade gap dropped 21.1% to $61.0 billion. Inflation correction is not applied to the numbers. The so-called real goods trade imbalance increased from $96.1 billion in November to $98.6 billion after accounting for inflation.

In 2022, the U.S.-Canada goods trade imbalance increased from $31.6 billion to $81.6 billion. The $382.9 billion goods trade deficit with China increased by $29.4 billion.

Wall Street stocks were trading at a lower level. Against a basket of currencies, the dollar increased. Prices for US Treasury notes varied.

Source: Reuters
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