The U.S. goods trade deficit increased more than anticipated in November, posing potential challenges for the country’s economic growth trajectory. According to data from a Reuters report dated December 27, 2024, the goods trade gap expanded to a seasonally adjusted $102.9 billion, up from $98.3 billion in October.

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This rise in the trade deficit was driven by a rebound in imports, which surged by $12 billion or 4.5% to reach $279.2 billion. Meanwhile, exports also experienced growth, increasing by $7.4 billion or 4.4% to $176.4 billion.

However, this still resulted in a larger-than-expected trade gap, sidelining the prediction by economists previously surveyed, who had forecast the deficit at $100.65 billion. According to IndexBox platform data, the November statistics highlight a significant 30.1% drop in exports in the ‘other goods’ category, countered by a 15.1% rise in imports within the same classification, contributing significantly to the widening deficit gap.

If this trend continues, the potential for trade to act as a contributor to the gross domestic product (GDP) growth in the fourth quarter appears slim. Previously, in the third quarter of the year, the U.S. economy had grown at a 3.1% annualized rate, despite net trade reducing this growth by 0.43 percentage points. With businesses potentially accelerating imports to preempt possible tariff hikes from the incoming administration, this could further tighten the trade balance, potentially impeding GDP growth in the fourth quarter.

More detailed reports incorporating data on services trade are expected in early January, which may shed additional light on the broader economic implications of the goods trade deficit and future prospects for growth.

Source: IndexBox Market Intelligence Platform