The trade deficit of the U.S. economy widened to $40.6 billion in December from $38.3 billion in the prior month. Exports (+1.8%) and imports (+2.6%) of goods and services advanced in December. Petroleum imports (+12.2% in real terms) made up a large part of imports in December.

After adjusting for inflation, the trade deficit of goods widened to $46.0 billion during December from $45.2 billion in November. In the fourth quarter, the trade deficit narrowed noticeably and lifted growth of real GDP. The advance estimate of real GDP includes assumptions of the trade deficit in December. The December estimate of the trade deficit is smaller compared with assumptions in the advance report, which implies that an upward revision is likely. However, the net impact will be determined after the report on inventories and retail sales are published next week.

The economic recovery led to an increase in exports and imports in 2010 after the sharp drop in trade during 2009 due the Great Recession.

Exports to China in 2010 made up 7.2% of total exports of the United States compared with 5.4% and 6.6% in 2008 and 2009, respectively. At the same time, imports from China as a percent of total imports were little changed in 2009 and 2010.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.