Goods Deficit Widens Despite Jump In Exports

Cross-border goods trade is very strong even if the nation's deficit is increasing. The goods deficit for December widened to $71.6 billion though exports, totaling $137.6 billion, jumped sharply for a second month, up 2.7 percent following November's revised 3.3 percent gain. But the rise in exports was outdone by the larger category of imports which came in at $209.2 billion for a 2.5 percent increase.

Looking at details, exports show wide strength including for the central component of capital goods which rose 2.7 percent to $47.6 billion following November's 5.6 percent gain. Exports of consumer goods, which are usually a weakness for the nation, are also up with a 2.7 percent gain to $17.5 billion following the prior month's 4.1 percent rise. But the biggest weakness in the U.S. trade picture remains imports of consumer goods which, at $55.6 billion in the month, surged 6.0 percent following November's 4.8 percent increase.

The cross-border economy is very active though dependence on foreign consumer goods continues to widen the deficit. Note that today's data are incorporated into the net export component of this morning's fourth-quarter GDP report which widened noticeably.

Recent History Of This Indicator:
The goods deficit in December is expected to narrow to a consensus $69.0 billion vs an unusually wide $70.0 billion in November ($69.7 billion initially reported). November's data actually pointed to very strong cross-border demand with goods exports rising a sharp 3.3 percent to $134.0 billion and imports, which however are a negative in the GDP calculation, up 3.0 percent to $204.0 billion. Also released with the report, and also GDP inputs, will be advance December data for wholesale inventories, where the build is seen at 0.3 percent, and retail inventories which are only expected to inch 0.1 percent higher.