America's trade deficit 'widens for first time in four months'
Published 07/02/2011 | 05:00
ECONOMISTS believe the US trade deficit widened for the first time in four months in December, hit by rising oil prices and increased spending on imported consumer goods.
The gap between US imports and exports will hit $40.2bn (€29.6bn) when data for December is released on February 11, according to a survey of economist by Bloomberg.
The economists reckoned consumer confidence in the US climbed in February while unemployment benefit claims fell.
As well as rising oil prices, US imports rose on the back of restocking of consumer products after American consumers spent at a faster clip in the fourth quarter.
"In order to rebuild inventories of consumer goods, you would expect to see stronger import growth," said Jay Bryson, a global economist at Wells Fargo Securities Inc in Charlotte, North Carolina.
"Export growth remains pretty strong as most trading partners are experiencing solid rates of growth," he added.
The Standard & Poor's Supercomposite Industrial Machinery Index, which includes heavy machinery manufacturers like Caterpillar and Deere & Co, rose by 64pc in the past year. The US export sector is growing three times faster than big business.
In the US, consumer spending accounts for 70pc of the economy and is growing at the fastest rate in four years. (Bloomberg)