Trade deficit probably narrowed in November
The trade deficit in the U.S. probably narrowed in November as fuel imports dropped and exports rebounded, economists said before a report this week.
The gap shrank to $41.2 billion from October’s $42.2 billion, according to the median forecast of 51 economists surveyed by Bloomberg News before figures due Friday from the Commerce Department.
Sustained job gains and the drop in oil prices that is helping to reduce the import bill are boosting the buying power of U.S. households, giving the world’s largest economy a lift. In addition, stabilization in global growth, led by a pickup in China, will probably keep propelling sales overseas for American companies.
“The export side of it just sort of swamps the import side this month,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York. “Exports have been a sector of significant strength in the U.S.”
“That’s a story that could remain in place in 2013” given the recent rebound in global manufacturing, Porcelli added.
Manufacturing in China unexpectedly expanded in December at the fastest pace in 19 months, boosting optimism that a recovery in the world’s second-biggest economy is gaining traction, a Dec. 31 report showed. The country’s economy may have rebounded after a seven-quarter slowdown as the government increased spending on infrastructure and accelerated investment-project approvals.
American manufacturers are selling more overseas as a result. The Institute for Supply Management, based in Tempe, Ariz., said its factory export gauge rose in December to a seven-month high. Commerce Department data shows exports slumped in October by the most in almost four years.
The November trade data may have also been influenced by port disruptions. Superstorm Sandy made landfall Oct. 29, causing billions of dollars in damage along the East Coast and delaying freight traffic in the region. In addition, clerical workers at the ports of Los Angeles and Long Beach, the largest U.S. port complex, went on strike Nov. 27 for eight days, affecting about $1 billion of trade a day.
Lower fuel prices probably held back the value of imports. The cost of imported petroleum dropped 3.6 percent in November, according to figures from the Labor Department. The cost of all goods bought overseas fell 0.9 percent in the month.