The US trade deficit experienced a notable increase in November as the growth of imports outpaced exports, according to the latest data released by the government. The goods and services deficit widened by 6.2% month-over-month, reaching approximately $78.19 billion, with projections indicating a deficit of $78.3 billion based on a compilation of analyst surveys by Bloomberg. Imports saw a significant rise of 3.4%, totaling $351.56 billion, while exports increased by 2.7%, summing up to $273.37 billion, as outlined in the official statistics.
This divergence in growth rates has led to speculations about net trade's potential impact on economic growth in the US for the fourth quarter. Matthew Martin, a Senior US Economist at Oxford Economics, mentioned that net trade is anticipated to be either slightly positive or neutral to economic growth in the final quarter of the year, marking the first occurrence of such a situation since the last quarter of 2023.
However, he cautioned that there remains considerable uncertainty surrounding these estimates, largely due to the looming possibility of another dockworkers strike set for mid-January. Martin stated, "Should importers have moved ahead shipments to hedge against this risk, a strong December gain could push net trade to a slight drag on growth." In more detail, the sequential growth in goods imports for November rose to $280.92 billion from $269.33 billion.
This increase was particularly driven by a surge in industrial supplies, materials, and capital goods. Conversely, goods exports also saw an uptick, growing to $177.55 billion from $171.38 billion, predominantly due to industrial supplies and automotive vehicles, parts, and engines. On the services front, imports rose slightly to $70.64 billion compared to $70.6 billion previously recorded.
Exports in this category advanced to $95.81 billion, up from $94.93 billion, fueled by gains in travel and transport services, as outlined by the Bureau of Economic Analysis (BEA) and the Census Bureau. Over the year leading to November, the overall goods and services deficit experienced a 13% increase compared to the same timeframe in 2023.
Martin highlighted that trade policy uncertainty stemming from the incoming Donald Trump administration remains a significant consideration for long-term economic forecasts. He pointed out that recent comments from Trump, which have suggested that previous notions of tariff decreases may not materialize, add a layer of complexity to future tariff strategies.
This ensuing ambiguity leaves analysts questioning the potential scale and timing of any forthcoming tariff implementations..