U.S. trade gap widens to 3-month high

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney) -- The U.S. trade gap widened to a three-month high in December, driven largely by rising commodities prices.

The trade balance, which measures the difference between the nation's imports and exports, grew to a $40.6 billion deficit in December, up from $38.3 billion in November, the Commerce Department said Friday.

That number was roughly in line with analysts' estimates, and represents the highest level since September 2010.

Exports totaled $163 billion in December, a rise of $2.8 billion from the month before, and imports totaled $203.5 billion, or $5.1 billion more than in November.

Rising oil prices took their toll on imports, particularly on industrial supplies and materials, said Jennifer Lee, an economist with BMO Capital Markets.

Imports in that category rose a whopping 10.4% largely due to rising energy prices and soaring prices for raw materials, she said.

For the year overall, the U.S. trade deficit fell much deeper into the red, to a whopping $497.8 billion, up from the $375 billion trade deficit in 2009.

But exports grew at a faster rate than imports, and that's at least an encouraging sign, Lee said.

"That's good news for U.S. manufacturers who are in the business of making and shipping goods overseas," she said. "And it helps the president's goal of doubling exports."

A year ago, President Obama announced his goal to double U.S. exports by 2015, spurring job growth in the American manufacturing sector.

Industry experts say that may be a lofty goal, especially given what they say is still an uneven playing field with the world's second largest economy, China.

"We do expect to see strong growth in exports in 2011," said Dan Meckstroth, chief economist for the Manufacturing Alliance. "But doubling exports is still a stretch goal. If the Chinese would allow their currency to appreciate 30% to 50%, it could be a more viable target."

Since the recession, trade imbalances have driven the rift between the two countries wider, as the U.S. still struggles with a trade deficit, and China builds a massive trade surplus.

The gap between the two countries widened to $20.7 billion in December - America's largest trade gap with a single country by far.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,356.87 288.00 1.69%
Nasdaq 4,644.31 96.48 2.12%
S&P 500 2,012.89 40.15 2.04%
Treasuries 2.15 0.08 3.72%
Data as of 12:50am ET
Company Price Change % Change
Bank of America Corp... 17.26 0.54 3.23%
General Electric Co 24.66 0.23 0.94%
Apple Inc 109.41 2.66 2.50%
Cisco Systems Inc 26.81 0.22 0.85%
Microsoft Corp 45.74 0.58 1.28%
Data as of Dec 17

Sections

That number will likely grow as the Obama Administration eases restrictions with the Communist country. More

Laurie Segall sits down with Reddit founder Alexis Ohanian and founder of AeroFS, Yuri Sagalov, to discuss how immigration reform could bring more skilled tech workers to the U.S. More

News startup The Skimm announced a new round of funding, 1 million active readers, and plans to expand into a 'lifestyle brand.' More

Congress waited until the last minute to decide what to do with a slew of expired tax breaks. They extended most of them, and a handful will affect individuals directly. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.