Updated on
Summary The US trade deficit widened to a six month high of $48.8 billion in December.
Amid stronger US demand -- spurred by the improving economy -- the import of goods grew by $2.7 billion, outpacing growing exports.Thanks to a weak greenback, exports rose for the first time in a few months, up 0.7 percent in December or nine percent from a year ago. Imports also gained ground however, said economist Jennifer Lee of BMO Capital Markets.That took the full 2011 shortfall to $558 billion. Half that figure was thanks to the deficit with China.The deterioration in December was all in the goods space and the petroleum deficit narrowed to $26.9 from $27.6 billion, said Steven Ricchiuto, chief economist with Mizuho Securities USA.The publication of the figures prompted more hand-wringing about the politically sensitive trade deficit with China.Figures released this morning by the US Department of Commerce show that the US racked up a whopping new record annual goods deficit with China of $295.5 billion in 2011, a significant increase from the previous record of $273 billion in 2010, the Alliance for American Manufacturing said.From an economic point of view, the trade deficit with China shows just how strong the headwinds are against insourcing jobs back to the United States.From a political point of view, the trade deficit with China shows just how little leadership Congress and the president are providing on international economic matters.
