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

Search for Jobs

Index Last Change % Change
Dow 18,080.14 21.45 0.12%
Nasdaq 5,092.09 36.02 0.71%
S&P 500 2,117.69 4.76 0.23%
Treasuries 1.93 0.01 0.68%
Data as of 9:14am ET
Company Price Change % Change
Comcast Corp 59.64 0.41 0.69%
Cisco Systems Inc 28.82 0.14 0.51%
Time Warner Cable In... 155.26 6.50 4.37%
Micron Technology In... 29.20 -0.32 -1.07%
Verizon Communicatio... 50.03 -0.02 -0.04%
Data as of Apr 24
Sponsors

Sections

A major earthquake was the last thing Nepal needed. Even before one of the country's major fault lines rumbled to life, the country was beset by challenges. More

Google and Facebook have built tools, such as Person Finder and Safety Check, which help people locate their loved ones in Nepal. More

A Girl Scouts Cookie Oven rolling out to Wal-Mart, Target, Kmart stores this summer will let you bake those iconic thin mints right at home. More

Imagine having a three-day weekend every week and being paid the same full-time salary. It can be done if your employer offers you the option of a compressed workweek. More