U.S. Trade Deficit Unexpectedly Widens To $46.6 Billion In December

(RTTNews) - With imports jumping and exports falling, the Commerce Department released a report on Thursday showing that the U.S. trade deficit unexpectedly widened in the month of December.

The Commerce Department said the trade deficit widened to $46.6 billion in December from a revised $39.8 billion in November, reflecting the widest deficit since November of 2012.

The wider trade deficit came as a surprise to economists, who had expected the deficit to narrow to $37.9 billion from the $39.0 billion originally reported for the previous month.

While the wider deficit surprised economists, Paul Ashworth, Chief U.S. Economist at Capital Economics, said the data was broadly in line with assumptions made by the U.S. Bureau of Economic Analysis, likely resulting in no revisions to fourth quarter GDP growth.

A sharp jump in the value of imports contributed to wider deficit, with imports surging up by 2.2 percent to $241.4 billion in December from $236.2 billion in November.

Imports of industrial supplies and materials soared by 5.3 percent, partly reflecting a notable increase in the volume of imported crude oil.

On the other hand, the report showed that the value of exports fell by 0.8 percent to $194.9 billion in December from $196.4 billion in November.

The decrease was partly due to a sharp drop in exports of industrial supplies and materials, which tumbled by 7.3 percent.

"Some of this may reflect the weakness of global demand and/or the stronger dollar," Ashworth said. "It could also be due to the West Coast port dispute."

Meanwhile, the Commerce Department said the goods deficit widened to $66.0 billion in December from $59.1 billion in November, while the services surplus inched up $19.5 billion from $19.3 billion.

The report also showed that the U.S. trade deficit with China widened to $30.4 billion in December from to $29.8 billion in November.

"This jump in the deficit is nothing to be overly alarmed about since, rather than a reflection of the stronger dollar, it is mostly due to the volatility of energy imports and exports," Ashworth said.

He added, "Both the price and volume of energy imports will fall sharply in January and we would expect the monthly deficit to be back below $40 billion per month soon."