The U.S. trade deficit in goods rose sharply in November to a record high, as imports of merchandise mushroomed while exports fell.
Goods exports declined 2.1 percent over the month, or $3.3 billion, to $154.7 billion, while imports rose by 4.7 percent, or $11.3 billion, to $252.4 billion.
Since trade deficits subtract from economic output in GDP calculations, the figures suggest a softer print is in store for U.S. economic growth numbers for the fourth quarter—and for the year as a whole.
The Commerce Department report also showed a rise in both wholesale and retail inventories last month, as businesses sought to bolster inventories in the face of strong consumer demand, boosted by federal stimulus and a rebound of economic activity from the pandemic recession.
Economists are generally predicting a solid rebound in the final quarter of the year, as long as high inflation and a rise in COVID-19 cases don’t dampen economic activity.
“In less than a month’s time, the swift and dramatic emergence of the Omicron variant has created a higher level of risk and uncertainty for the economic recovery,” Bankrate senior economic analyst Mark Hamrick told The Epoch Times in an emailed statement.
Surging inflation, which has emerged as a key concern among U.S. consumers, has prompted the Federal Reserve to accelerate the pace of scaling back stimulus.
As 2021 draws to a close, the main U.S. stock indexes are on pace for their third straight year of strong annual returns, with historic levels of fiscal and monetary stimulus providing a tailwind to risk assets.
Overall, economists expect the U.S. economy to grow by around 5.5 percent for the entire year, which would be the best showing since 1984 and a sharp rebound from 2020, when the economy contracted by 3.4 percent.