U.S. Merchandise Trade Gap Widens to Largest Since 2015

(Bloomberg) -- The U.S. merchandise trade deficit reached a more than two-year high in November, while inventories at wholesalers and retailers increased, according to preliminary figures released Thursday by the Commerce Department.

Highlights of Advance Trade and Inventories (November)

  • Goods-trade gap grew to $69.7b (est. $67.9b), the widest since March 2015, from $68.1b the prior month
  • Exports of goods rose 3% to $133.7b on increased shipments of automobiles and consumer and capital goods
  • Imports increased 2.7% to a record $203.4b on more consumer goods and industrial supplies such as oil

Key Takeaways

Demand for the goods remained elevated as U.S. consumers, who are upbeat about the economy, continue to spend. At the same time, companies are boosting investment in equipment, helping explain demand for imported capital goods in November. Imports reached a fresh all-time high last month and will probably remain robust as a report Wednesday showed record-high buying intentions for household goods from refrigerators to carpets and washers.

Meantime, stronger global growth is boosting demand for U.S.-made goods. Exports climbed to the highest level in nearly three years. While a wider trade deficit will probably weigh on economic growth in the fourth quarter, today’s data also showed a pickup in inventories that will help boost gross domestic product.

U.S. Merchandise Trade Gap Widens to Largest Since 2015

Other Details 

  • Wholesale inventories increased 0.7 percent m/m (est. 0.3% gain) after a 0.4 percent decline
  • Retail stockpiles rose 0.1 percent m/m after no change
  • Imports of industrial supplies increased 4.7 percent, while consumer goods were up 4.2 percent
  • Exports of motor vehicles jumped 7.5 percent, shipments of capital goods increased 5.6 percent and exports of consumer merchandise rose 4 percent
  • Inventories of non-durable goods at wholesalers rose 1.4 percent; durables up 0.2 percent
  • 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

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