zimv20
Feb 13, 2004, 01:28 PM
link (http://www.nytimes.com/2004/02/13/business/13CND-TRAD.html?hp)
The United States trade deficit increased sharply in December, the Commerce Department reported today, as America's appetite for foreign goods and services continued to outstrip overseas demand for United States exports.
For the month, the shortfall rose to $42.5 billion, from a slightly revised $38.35 billion in November. It is the biggest single monthly trade deficit since March, when the shortfall was $42.95 billion.
The number was well above the $40.0 billion deficit most analysts had forecast. The larger than expected number will almost certainly lead the government to lower its economic growth figures when it issues revised figures for the fourth quarter.
"We have lowered our fourth-quarter growth figures to 3.2 percent from the previously reported figure of 4 percent," Bruce Kasman, head of economic research at J.P. Morgan said. "Trade is responsible for about half a percentage point of that reduction."
The December deficit figure pushed the 2003 trade shortfall to a record $489.4 billion, a 17 percent increase from 2002.
The United States has been running annual trade deficits since the early 1970's. But the problem has grown worse in the last few years, as the deficits have risen as a percentage of gross domestic product.
At least part of the problem, analysts said, is due to sluggish foreign demand. In addition, for much of the 1990's and into the current decade the strong dollar hampered the competitiveness of American exports on world markets.
But the value of the dollar peaked early in 2002. Since then, it has declined by about 14 percent against a trade-weighted basket of 40 currencies, according to J.P. Morgan.
(more)
The United States trade deficit increased sharply in December, the Commerce Department reported today, as America's appetite for foreign goods and services continued to outstrip overseas demand for United States exports.
For the month, the shortfall rose to $42.5 billion, from a slightly revised $38.35 billion in November. It is the biggest single monthly trade deficit since March, when the shortfall was $42.95 billion.
The number was well above the $40.0 billion deficit most analysts had forecast. The larger than expected number will almost certainly lead the government to lower its economic growth figures when it issues revised figures for the fourth quarter.
"We have lowered our fourth-quarter growth figures to 3.2 percent from the previously reported figure of 4 percent," Bruce Kasman, head of economic research at J.P. Morgan said. "Trade is responsible for about half a percentage point of that reduction."
The December deficit figure pushed the 2003 trade shortfall to a record $489.4 billion, a 17 percent increase from 2002.
The United States has been running annual trade deficits since the early 1970's. But the problem has grown worse in the last few years, as the deficits have risen as a percentage of gross domestic product.
At least part of the problem, analysts said, is due to sluggish foreign demand. In addition, for much of the 1990's and into the current decade the strong dollar hampered the competitiveness of American exports on world markets.
But the value of the dollar peaked early in 2002. Since then, it has declined by about 14 percent against a trade-weighted basket of 40 currencies, according to J.P. Morgan.
(more)
