Optimism as November trade deficit increases to $36.4 billion
Exports also rise as economy shows signs of recovery
WASHINGTON - The US trade deficit jumped to the highest level in 10 months as an improving US economy pushed up demand for imports. Exports rose as well, however, boosted by a weaker dollar, supporting the view that American manufacturers will be helped by a rebounding global economy.
The Commerce Department reported yesterday that the trade deficit jumped 9.7 percent to $36.4 billion in November, a bigger imbalance than the $34.5 billion deficit economists had forecast.
Exports rose 0.9 percent, the seventh consecutive gain, as demand grew for American-made autos, farm products, and industrial machinery. Imports, however, rose a much faster 2.6 percent, led by a 7.3 percent rise in petroleum imports.
The politically sensitive deficit with China narrowed by 10.8 percent in November to $20.2 billion as US exports to China hit a record high. Through November, the deficit with China is still the largest the United States incurs with any country, but it is down 15.9 percent from the same period in 2008.
US manufacturers contend China is unfairly manipulating the value of its currency to gain trade advantages, a point President Obama raised with Chinese leaders during his November visit to that country.
Through the first 11 months of 2009, the overall US trade deficit was running at an annual rate of $371.59 billion, down by nearly half from the previous year’s imbalance of $695.94 billion. That improvement reflected a deep recession in the United States, which cut sharply into consumer demand for foreign products.
But as the US economy has begun to mount a recovery from the worst downturn since the Great Depression, imports have started to rise. Economists expect that development will continue in 2010, and they are predicting a higher trade deficit as a result.
However, they also contend that the fortunes of American manufacturers will be lifted by a continued rise in demand for US exports as the country’s major overseas markets mount a recovery. The fall in the dollar against most major currencies since the US currency hit a 2009 high last March is also expected to boost export sales.
Nigel Gault, an economist at IHS Global Insight, said he expected the trade deficit to rise about 24 percent next year. But even with that gain, he said, strong overseas demand and a weaker dollar would lift the fortunes of US manufacturers.
He said that after averaging about $31 billion a month in 2009, the trade deficit for 2010 would average about $38 billion a month, well below the $60 billion-plus deficits seen as recently as 2008.