US trade deficit hits seven-month high as exports stay low

Published time: January 11, 2013 20:57
Edited time: January 12, 2013 00:57
Ford production worker James Ziya works on the final assembly line for batteries for Ford electric and hybrid vehicles at the Ford Rawsonville Assembly Plant in Ypsilanti Twsp, Michigan (Reuters/Rebecca Cook)

The US trade deficit widened to $48.7 billion in November as visible imports grew by 3.8 percent and far outpaced the number of exports, thereby slowing the growth of the US economy and bringing the trade gap to a seven-month high.

The trade gap grew unexpectedly by 16 percent, which economists attribute partially to the mass import of Apple’s newest iPhone and iPad tablets, which are assembled in China. Cell phones accounted for one-fifth of the overall gain in November, while pharmaceuticals, diamonds and clothes were also imported at a much higher rate than previously. In a one-month period, US imports increased 3.8 percent to $231.28 billion.

At the same time, exports were only up by 1 percent in November and brought in only $182.55 billion. While the sale of telecommunications equipment increased slightly, the sale of food, feeds and beverages decreased. US shipments to Europe, which account for about one fifth of all US exports, dropped by 2.5 percent after having fallen 5 percent in the previous month.

Trade deficits indicate a negative trade balance, which Warren Buffet, founder of Berkshire Hathaway, described in 2006 as a contribution to US economic problems.

“The US trade deficit is a bigger threat to the domestic economy than either the federal budget or consumer debt and could let to political turmoil,” he told the Associated Press. “Right now, the rest of the world owns $3 trillion more of us than we own of them.”

The numbers have significantly changed since 2006, particularly the US trade deficit with China, which totaled $29 billion in November and is on track to set a new annual record in 2012. But Martin Schwerdtfeger, a senior economist at TD bank, told the Washington Post that’s there’s a silver lining: the increase in imports means consumers are spending more at home.

“The higher imports could mean that domestic consumption is improving. That would override some of the drag from a higher trade deficit,” he said.

The National Association for Business Economics predicts that the trade deficit for 2013 will total $533, which would be a small improvement from the $540 billion deficit they predict for 2012 and a larger improvement from the 2011 trade deficit of $546.6 billion.

The US balance of trade has been decreasing since the early 1990s. It began to rise in 2006, but began to drop again in 2009. The US has not had a trade surplus since 1975.

Comments (11)

SuperiorEuropean (unregistered) 14.01.2013 18:04

It makes me very happy that the usa is faltering.
Those criminals have held back Europe often enough and for long enough.
If you are an ignorant 'amercian' you will have NO IDEA what I'm talking about. Your tv is probably full of 'how bad it is in Europe' and how 'anyday soon' the whole of Europe is going down. really? Not disinformation at all, eh? Been saying it on u.s.tv for a decade and no catastrophe yet!

That affects ME.
The REALLY crippled usa, crippled by huge debts and huge structural problems, should have the full might of the world's press directed at it for a change. see how you like them apples, usa!

Europe's problems are TINY compared to the usa and its debt.
Europe has only to pass a few laws and start EuroBond sales and it's fixed.

WHO is the usa going to borrow from? China? They're dumping dollars ('restructuring currency holdings') and allowing their u.s.treasury bonds to expire without rolling them over (look up some of the bigger phrases and words or get mommy to look them up for you!) and so 'rebalancing away from treasuries', in very polite central bank-speak!

E urope has no real problems that can't be fixed.
The usa has no real problems THAT CAN BE FIXED!

BIG difference! Bye bye, usa! Buy a gun!

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juda 14.01.2013 16:08

usa.....not to worry USAans.  Not to worry.  A leading consultant from IHS Global Insight informed us (through Reuters) that we will have 1.7 million more in jobs this year and 3 million more by 2020 just by one industry:  Oil and Gas and called 'Unconvential Drilling'  & will give us an oil and gas boom!  Excited ya are?  Yeah, unconvential means Blasting sand, water and CHEMICALS into the shale to release oil and gas.  It also means imminate domain where they want to go on private home properties that don't want them there.  It also means pollution to the country's waters and air which eventually will go all over the world. and this has been proven time and time again by independant scientists as well as home town folk who have also tested as well as those folk who have already been affected with health problems  --againt the gov't/corporate scientists who say:  heyyyy, it's okay!  When in reality it only takes common sense doesn't it?  Supposedly both of the Two Evils favored this.  Yep.  Would common sense come into as to why they aren't using their profits to develop renewable energies like solar, geo, wave, and wind?  Or better yet why isn't our govt. doing this with OUR money instead of helping out the planet rapists  --and making it Nationalized so the profits on 'survival needs' are to the people rather than the few?  This along with the increase in big and small munitions for warring and all the cyber surveillance and cyber intelligence and soldiers and soldierettes and all they cost and all we give to Israel and countries to bribe into warring --we'd oughta be just fine huh?  Oh by the way, --this dude also said the Govt. is thinking of giving them (Private Corpies) tax breaks to do this.  Now isn't it time for the Corporate Trolls to come in the room and tell ME how stupid I am?  Hang out kids, they'll be here with all their knowledge and experience and dangling carrots.  C-O-M-M-O-N   S-E-N-C-E!

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JPERES (unregistered) 13.01.2013 17:13

Thanks to ECB and FED which are doing everything to diminish this issue, the first by keeping rates the second by devaluating the $. Both are sending the economy to the recession. People don't buy because they expect nothing good base on these policies and information delivered, not because the unemployment is high.  Other aspect of the deficits is that US produces almost nothing. Most of the American multinationals are operating in China or far East because is more profitable. What do you expect? In exchange China buys American debt. Perfect game: we are instaled in a perpetual crisis. Who wins? FED's friends. It is not coincidental that rich people are richer and middle class is poorer.  Who cares comsumption? Go out for a walk and talk with small businesses, they are making even!! just to pay bills. Good job FED!! Thank you for giving so much money for free to your friends.

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