(Reuters) – The U.S. goods trade deficit widened more than expected in November on a rebound in imports, clouding the picture over whether trade might add to economic growth this quarter for the first time in a year.
The goods trade gap increased to a seasonally adjusted $102.9 billion last month from $98.3 billion in October, the Commerce Department’s Census Bureau said on Friday. Economists polled by Reuters had forecast the goods deficit at $100.65 billion.
While exports rose by $7.4 billion, or 4.4%, to $176.4 billion, imports climbed by $12 billion, or 4.5%, to $279.2 billion. A 30.1% drop in exports in the “other goods” category, alongside a 15.1% increase in imports in the same category, accounted for most of the difference.
A larger-than-expected reduction in the trade deficit in October, when imports dropped by the most in nearly two years, had potentially set trade up as a contributor to gross domestic product growth in the current fourth quarter. Trade last added to growth in the fourth quarter of 2023.
The latest figures, though, have narrowed the margin by which goods export growth through the first two months of the quarter has exceeded imports growth. Moreover, businesses worried about President-elect Donald Trump’s threats to raise tariffs on foreign goods may try to front load imports before he takes office next month. This could further narrow and possibly reverse exports’ edge and leave trade as a drag on GDP growth for a fourth straight quarter.
Additional data on the November trade scene, including services imports and exports, will be reported in early January.
The U.S. economy grew at a 3.1% annualized rate in the third quarter even as net trade subtracted 0.43 percentage point from growth. The Federal Reserve Bank of Atlanta’s GDP Now tracker has growth in fourth quarter on pace to match the third quarter rate.
