U.S. trade deficit widens; weekly jobless claims up modestly
By Lucia Mutikani
WASHINGTON (Reuters) - The U.S. trade deficit in December widened sharply to its highest level since 2012 as a stronger dollar appeared to suck in imports and weigh on exports, which could see the fourth-quarter economic growth estimate revised lower.
The Commerce Department said on Thursday the trade deficit jumped 17.1 percent to $46.6 billion, the largest since November 2012. It was the biggest percentage increase since July 2009 and also reflected a sputtering global economy.
"It is not hard to come up with reasons for the weakness in today's report - sluggish foreign growth and a strong dollar are the obvious ones," said Michael Feroli, an economist at JPMorgan in New York.
Wall Street had expected the trade gap to narrow to $38 billion. When adjusted for inflation, the deficit widened to $54.7 billion from $48.7 billion in November.
December's shortfall was wider than the government had assumed when it reported last week that gross domestic product had expanded at a 2.6 percent annual rate in the fourth quarter. Trade was estimated to have subtracted 1.02 percentage point from GDP growth.
Economists said it now appeared the drag on growth was bigger and they expect the government to lower the fourth-quarter growth estimate by as much as four-tenths of a percentage point when it publishes revisions later this month.
On an inflation-adjusted trade-weighted basis, the dollar appreciated 5.3 percent last year.
While trade is on the back foot, the labor market is weathering the strong dollar and the global slowdown. Continued...