U.S. trade deficit likely to have changed just a little in December, says Societe Generale

The trade deficit of the U.S. is expected to have changed a little in December. The advance census goods balance for December was quite stable, contracting to a deficit of USD 65 billion from November’s deficit of USD 65.3 billion level. This suggests virtually no change in the overall trade balance that might have recorded a reading of a deficit of USD 44.9 billion, according to a Societe Generale research report.

The trade in the fourth quarter was a significant drag on the economic growth, negative contributing a hefty 1.7 percentage points of GDP after contributing just over 0.80 percentage points in the third quarter. The severe reversal was partially due to goods exports that rose 14.4 percent annualized in the third quarter but dropped by nearly 7 percent in the December quarter.

Import of goods also increased sharply by almost 11 percent. The Commerce Department statisticians assumed in their fourth quarter GDP estimate that the goods balance would come in at a deficit of USD 66.7 billion, which at the time was unchanged as compared with the original November figures, noted Societe Generale.