Exports increased only 1 percent. And exports to Europe fell 1.3 percent, further evidence of the prolonged debt crisis that has gripped the region.
Paul Ashworth, chief U.S. economist at Capital Economics, predicts trade trimmed growth by about 0.5 percentage point in the final three months of the year. He expects fourth-quarter growth to be no more than an annual rate of 1.5 percent. That would be nearly half the 3.1 percent rate reported for the July-September quarter, which was helped by healthy growth in exports.
Martin Schwerdtfeger, senior economist at TD Bank, also expects the trade deficit to subtract from October-December growth. But he said the flood of imports could be signaling stronger consumer spending and business investment.
“The higher imports could mean that domestic consumption is improving. That would override some of the drag from a higher trade deficit,” Schwerdtfeger said.
The U.S. trade deficit with China, the largest with any country, totaled $29 billion in November.