Trade Deficit Widened in December as Exports Fell

The December increase in the goods and services deficit reflected an increase in the goods deficit of $1.3 billion to $62.5 billion and an increase in the services surplus of $0.1 billion to $19.2 billion.

The Bureau said for 2015 in general the goods and services deficit was $531.5 billion; an increase of $23.2 billion, or 4.6 percent, from 2014.

Economists polled by Reuters had forecast the trade shortfall widening to US$43.0 billion in December.

Commodity exports cratered along with prices previous year while manufacturers were slow to take advantage of the 16 per cent drop in the currency against the USA dollar and a budding American recovery.

Exports rose 3.9 per cent to $45.4-billion on the month, led by aircraft and automobiles, faster than a 1.6 per cent gain for imports to $45.9-billion.

USA exports fell in 2015 and that hurt the US economy. Imports also retreated 3.1 per cent.

A wider trade deficit is a drag on economic growth because it means fewer overseas sales by American producers and larger imports of foreign goods.

The market expectation for trade deficit was to be $43.2 billion for December 2015.

The U.S. deficit with China set a record in 2015, rising 6.6 percent to US$365.7 billion. The deficit with the European Union also set a record, rising 7.9 percent to $153.3 billion.

The unemployment rate dipped to 4.9 percent, its lowest level since early 2008.

The trade balance measures the difference between exported and imported goods and services in a given month in the U.S. A deficit shows that more goods and services were imported than exported for that month.