U.S. trade deficit in goods jumps 17.5% to record $97.8 billion as imports surge

view original post

By Jeffry Bartash

The numbers: The trade deficit in goods surged by 17.5% in November to set an all-time high, keeping the U.S. on track in 2021 to post its biggest annual shortfall on record.

An early or advanced look at the trade gap in goods showed that it increased to $97.8 billion in November from $83.2 billion in October, according to the U.S. Census Bureau.

Barring a big dropoff in December, the U.S. is poised to surpass a record set in 2006 and incur its biggest trade deficit ever.

An advanced estimate of wholesale inventories, meanwhile, revealed a 1.2% increase in November. And retail inventories jumped 2%, according to an early estimate.

What happened: U.S. imports of goods rose 4.7% to $252.4 billion in November.

Americans have snapped up huge quantities of imports since the U.S. fully reopened earlier this year. Stimulus money, rising wages and a fast-recovering economy have given them the financial means and confidence to spend.

U.S. goods exports slipped 2.1% to $154.7 billion.

The trade deficit is likely to subside in 2022 as other countries rebound, but U.S. deficits have been high for years and are likely to remain that way. A higher deficit subtracts from gross domestic product, the official scorecard for the U.S. economy.

The full trade report, which includes services such as tourism and travel, comes out next Thursday.

Big picture: The U.S. economy is still growing steadily and has exceeded pre-pandemic levels despite the background noise of large trade deficits.

The bigger problem for the economy are bottlenecks that are preventing imports and exports from getting to their intended destinations on time. That’s helped spawn the biggest increase in U.S. inflation in almost 40 years and could hurt the economy in 2022 if the supply constraints don’t clear up.

Market reaction: The Dow Jones Industrial Average and S&P 500 were set to open lower in Wednesday trades.

-Jeffry Bartash

 

(END) Dow Jones Newswires

12-29-21 0841ET

Copyright (c) 2021 Dow Jones & Company, Inc.