Economic Report: U.S. trade deficit sinks 21% to 26-month low as imports tumble

by | Jan 5, 2023 | Stock Market

The numbers: The nation’s trade deficit shrank 21% in November to a more than two-year low of $61.5 billion, largely due to fewer imports of consumers goods and cheaper oil. Economists polled by The Wall Street Journal had forecast a $63.1 billion shortfall. The size of the deficit in November was the smallest since September 2020.

The deficit narrowed from $77.8 billion in October, the government said Thursday. Lower trade deficits add to gross domestic product, the official scorecard for the economy. Key details: Imports tumbled 6.4% to a 11-month low of $313.4 billion. Americans are spending more of their money on services instead of goods, partly explaining the decline. The cost of oil has also fallen. Exports slid a smaller 2% to $251.9 billion, retreating again from a record high in August. Slower economic growth in other countries and a strong dollar that’s made American goods and services more expensive have put a dent in exports. Big picture: Massive swings in the U.S. trade deficit this year haver masked steady growth in the economy. GDP turned negative in the first quarter, for instance, and rebounded sharply in the third quarter large because of the trade deficit. What the falling trade gap is signaling now, however, is somewhat slower U.S. and global growth in the months ahead. American consumers have trimmed their spending, for one thing, and that’s p …

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