* U.S. trade deficit widens to $48.7 billion in November
* Prices for imports decline 0.1 percent in December
By Jason Lange
WASHINGTON, Jan 11 The U.S. trade deficit
unexpectedly widened in November due to a surge in imports,
pointing to a sharp slowdown in economic growth during the last
three months of 2012.
Still, the trade gap's growth was driven by imports of
consumer goods, a potentially positive sign for household
spending if the gains in imports were not a one-time rebound
following a disruptive storm.
America's trade deficit widened 16 percent in November to
$48.7 billion, the Commerce Department said on Friday.
Analysts were expecting the deficit to shrink to $41.3
billion, and the report led a host of economists to trim their
estimates of economic growth in the fourth quarter.
"This is not good news for the fourth-quarter GDP growth,"
said Peter Cardillo, an economist at Rockwell Global Capital in
When a country imports more than it exports, cash is sucked
out of its economy, subtracting from gross domestic product.
JPMorgan cut its forecast for fourth quarter GDP growth to a
0.8 percent annual rate from 1.5 percent. The economy grew at an
above-trend 3.1 percent pace in the third quarter.
The trade deficit was the widest since April. Imports surged
3.8 percent, the biggest gain in eight months.
Imports of consumer goods rose by $4.6 billion, while
imports of petroleum products fell by $870 million.
That might point to firmer consumer demand, which is the
main engine of the U.S. economy.
"The good news is the strength in imports is a sign that the
U.S. economy is buying imports," said Cary Leahey, an economist
at Decision Economics in New York. "Whatever the fourth quarter
GDP prints, it will understate the momentum."
At the same time, some of the strength in imports of
consumer goods could prove temporary, said Peter Newland, an
economist at Barclays. Some U.S. ports closed in late October
due to a mammoth storm, which disrupted trade and hit imports
Also, the risk remains that imported goods could languish on
businesses' shelves if purchasing managers are misreading
U.S. stock index futures opened lower and the dollar
weakened against the euro.
While the Commerce Department does not release seasonally
adjusted data for the U.S. trade deficits with countries and
regions, the U.S. goods trade gap with China fell 1.7 percent
from October, with a drop in exports outweighing a slighter fall
Imports surged 4.1 percent from the European Union, and were
up 6.4 percent from Germany.
Overall, seasonally adjusted exports rose 1 percent.
The increase was held back by a 1.3 percent decline in
exports to the European Union, which continues to battle a
sovereign debt crisis that has sent several of its member
countries into recession.
A separate report showed declining prices for U.S. imports
and exports in December, a sign of the chill in the global
economy that is hurting exporters but giving respite to U.S.
drivers stung by high fuel prices.
The Labor Department said import prices fell 0.1 percent in
December, in line with the expectations of economists polled by
Prices fell 0.1 percent for both fuel and non-fuel imports.
That points to a tame inflation environment, which should
allow the Federal Reserve to stay on its ultra-easy monetary
policy course as it tries to nurse the economy back to health.
Import prices fell 1.5 percent in the 12 months through
December, with prices for fuel down 6.4 percent over that period
and non-fuel prices up just 0.1 percent.
Export prices also fell in December from November, dragged
down by a 0.2 percent drop in prices for non-agricultural
exports. Prices fell for exported capital goods and consumers
U.S. manufacturers selling their goods abroad appear to have
declining power in pricing as the global economy takes a hit
from Europe's debt crisis.