Significantly exceeded expectations! The U.S. merchandise trade deficit in December expanded to a record high
The U.S. trade deficit in goods widened by 18% in December, reaching a record $122.1 billion, exceeding economists' expectations. Imports rose by nearly 4%, while exports fell by 4.5%. This indicates strong demand from U.S. businesses for imported goods, but weak overseas economies and a stronger dollar are putting pressure on exports. The widening trade deficit could weigh on U.S. GDP in the fourth quarter, and retail inventories fell by 0.3% for the first time. Complete trade data for December will be released on February 5
According to the Zhitong Finance APP, data released by the U.S. Department of Commerce on Wednesday showed that the U.S. goods trade deficit widened by 18% in December, reaching a record $122.1 billion, exceeding all expectations from economists surveyed by foreign media. This data is not adjusted for inflation and reflects the impact of import growth on the trade balance.
The data indicated that U.S. imports rose nearly 4% in December to $289.6 billion, while exports fell by 4.5% to $167.5 billion. This suggests that U.S. businesses continue to have strong demand for imported goods, while weak overseas economies and a strong dollar have put pressure on U.S. exports.
U.S. manufacturers continue to face challenges from sluggish overseas economic growth and a strong dollar, factors that may continue to widen the trade deficit this year. Additionally, the growth in imports may reflect U.S. companies' attempts to lock in overseas supplies in anticipation of potential new tariff policies that the Trump administration may implement.
The widening trade deficit could weigh on U.S. GDP in the fourth quarter. The Atlanta Federal Reserve's GDPNow forecast prior to the data release indicated that net exports would contribute negligibly to GDP, while a decrease in inventories is expected to lower GDP by 0.23 percentage points.
The report from the Department of Commerce also showed that U.S. retail inventories fell by 0.3% in December, marking the first decline in a year. Among these, automobile dealer inventories decreased by 1.2%, marking a third consecutive month of decline, ending a growth trend that had lasted over two years. Additionally, wholesale inventories also fell by 0.5%. More comprehensive trade data for December, including the balance of services accounts, is expected to be released on February 5