U.S. Trade Deficit Soars Amid Rising Imports

The U.S. trade deficit widened in November as imports surged, dampening hopes of trade contributing to economic growth this quarter. The goods deficit grew to $102.9 billion, with imports rising 4.5%. Concerns over impending tariffs may lead businesses to increase imports further, impacting GDP growth.

The U.S. trade deficit swelled more than anticipated in November due to a resurgence in imports, complicating predictions for economic growth this quarter. The goods trade gap expanded to $102.9 billion from $98.3 billion in October, according to data from the Commerce Department's Census Bureau. Economists had expected a $100.65 billion deficit.

Exports increased by $7.4 billion to $176.4 billion, whereas imports soared by $12 billion to reach $279.2 billion. Notably, a substantial 30.1% fall in exports within the 'other goods' category, coupled with a 15.1% rise in imports, largely accounted for the gap's expansion. A previous reduction in the deficit positioned trade as a potential growth contributor for the fourth quarter.

However, recent figures indicate narrowing gains in goods export growth compared to imports. Businesses, wary of President-elect Trump's tariff threats, might up-boost imports, further dimming trade's contribution to GDP. Continuous trade deficits have burdened GDP growth for several quarters, and additional trade data set for January could reveal further impact.

(With inputs from agencies.)