U.S. Trade Deficit Widens More Than Economists Forecast as Exports Decline

The U.S. trade deficit widened more than forecast in November as American exports declined and companies stepped up imports of crude oil and automobiles.

The gap expanded 10.4 percent to $47.8 billion, the widest since June, from a $43.3 billion shortfall in October, Commerce Department figures showed today in Washington. The deficit was larger than any of the estimates in a Bloomberg News survey of 75 economists.

The U.S. import bill was driven by demand for higher-priced crude oil at the same time American companies tempered orders for consumer goods on concern household spending will cool early this year. Exports from the U.S. declined to a four-month low, depressed by a drop in shipments to Europe.

“Domestic demand is a bit stronger than external demand as global growth weakens,” said Jeremy Lawson, a senior U.S. economist at BNP Paribas in New York. “The question is whether U.S. consumption can be maintained in the first part of the year post-Christmas. There are a lot of headwinds.”

The trade gap was projected to widen to $45 billion from an initially reported $43.5 billion in October, according to the median forecast in the Bloomberg survey. Estimates ranged from deficits of $41.8 billion to $47.6 billion. The November increase from a month earlier was the biggest since May.

Stock-index futures held losses after JPMorgan Chase & Co. said its profit dropped 23 percent. The contract on the Standard & Poor’s 500 Index expiring in March fell 0.6 percent to 1,284.6 at 8:48 a.m. in New York.

More Imports

Imports climbed 1.3 percent to a six-month high of $225.6 billion in November. The value of crude oil purchases increased to $27.3 billion from $26 billion. The price per barrel climbed for the first time in six months, to $102.50 from $98.84. Refiners imported 266.2 million barrels of oil in November, more than the 263.2 million in the previous month.

The trade shortfall excluding all petroleum products widened to $20.1 billion from $19.1 billion in October.

In December, the cost of petroleum eased, helping keep a lid on import prices. The Labor Department said today that its measure of the cost of imported goods fell 0.1 percent in December after a 0.8 percent jump a month earlier.

While the Commerce Department’s figures showed consumer goods imports declined in November, demand for capital goods made overseas climbed to a record $43.8 billion. Automobile imports rose $816 million in November to $22.3 billion.

Exports Decline

U.S. shipments abroad dropped 0.9 percent to $177.8 billion even as exports of consumer goods increased to a record $15.7 billion.

Demand for U.S.-made goods in emerging countries may help provide a buffer against any slowdown in Europe’s economy stemming from its debt crisis or slower growth in China.

Goods exports to newly industrialized countries climbed in November. The trade gap with China declined 4.3 percent to $26.9 billion. Exports to China climbed to the highest since December 2010, showing sustained demand from the nation for U.S.-made goods.

“Where we’re growing, we’re redeploying from more mature economies into emerging markets and we see good growth there across all our markets, Middle East, China, parts of Asia, India, Latin America,” Lisa McDermott, chief financial officer at Pall Corp. (PLL), said at a Jan. 11 investor conference. The Port Washington, New York-based maker of water purification systems reported 27 percent revenue growth at its Asian industrial segment in the quarter ended Oct. 31 from a year earlier.

European Union

The goods deficit with European Union nations widened 21.6 percent to $9.7 billion. A $4.7 billion U.S. shortfall with Germany was the biggest since October 2005.

After eliminating the influence of prices, which renders the figures used to calculate gross domestic product, the trade deficit increased to $47.5 billion from $44 billion. The number was wider than the $46 billion gap averaged in the third quarter. Trade contributed 0.4 percentage point to growth from July to September.

The dollar’s decline through most of 2011 may help maintain demand for American-made equipment. From the end of 2010 through a low on July 26, the dollar fell 5 percent against the currencies of U.S. major trade partners tracked by the Federal Reserve. The drop makes American goods cheaper abroad.

To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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