The US has posted an unexpected widening of its trade deficit in November as American retailers stocked up on foreign imports for the Christmas holidays.
The US Commerce department said that the trade gap widened by 16% to $48.7 billion, taking economists by surprise and meaning that the deficit is at its widest level since April 2012. Most analysts had been predicting the deficit to shrink.
The increase is thought to be the result of the increasing spending power of US consumers. Recent job data has come in at better-than-expected levels; with more people in work there is more money to be spent.
“As we improve and the rest of the world improves, exports and imports are both going to go higher’ said Brian Jones an economist based in New York. “You end up having deterioration in the accounts because I think exports will grow faster than exports.”
November’s trade data however, could have been impacted by super storm Sandy that caused widespread disruption to many ports on the Eastern seaboard. The storm made landfall on October 29th causing billions of Dollars worth of damage and delayed freight traffic to the region.
Overall, imports increased by 3.8% to $231.3billion, the highest level since April, up from $222.9 billion in October. The biggest increase in demand was for foreign cars and mobile phones. Exports increased by 1% in November to 182.6 billion after being bolstered by car sales and industrial parts.
On the whole the global trade picture seems to be improving. China recently posted an export jump of 14.1% from the previous year as well as a 19-month high for the pace of manufacturing expansion. With global trade seemingly on the rise, the world could make tentative steps to recovery.
The Pound to Euro exchange rate is currently trading at 1.2078
The Pound to US Dollar exchange rate is currently trading at 1.6122
The Pound to Australian Dollar exchange rate is currently trading at 1.5271
The Euro to US Dollar exchange rate is currently trading at 1.3345
The Euro to Pound exchange rate is currently trading at 0.8276
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