Best Financial Markets Analysis Article The trade deficit widened to $48.8 billion in December, putting the 2011 trade gap at $558 billion, the largest since 2008. Exports of goods and services advanced 0.7% in December, while imports of goods and services grew 1.3%. The advance estimate of fourth quarter real GDP contains assumptions about the trade deficit in December; the actual trade data for December suggest an upward revision of the 2.8% increase in real GDP, everything else the same.

Exports of goods grew at an annual rate of 5.2% in the fourth quarter vs. 8.6% in the third quarter. Exports of goods advanced at a slower pace in 2011 (+7.7%) compared with 2010 (+14.8%) reflecting slowing economic momentum among trading partners of the United States. As China, Brazil, and India implement suitable policies to stimulate economic activity, exports should gather steam in the latter part of 2012.

Imports of goods increased 1.4% in December after posting a 0.9% gain in the prior month. The U.S. economy grew at a 1.7% pace in 2011 vs. 3.0% in 2010; the slower pace of economic growth in 2011 translated into a smaller increase in imports of goods in 2011 (+5.8%) vs. 2010 (+14.6%). The trade deficit widened vis-à-vis Canada and Japan but narrowed vis-à-vis China, Mexico, and the EU.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.