WASHINGTON (Reuters): The US goods trade deficit widened sharply in December as slowing global demand and a strong dollar weighed on exports, another sign that economic growth slowed in the fourth quarter.
The Commerce Department said on Wednesday the goods trade gap jumped 12.8 percent to $79.5 billion in December, also with a boost from an increase in imports. Exports declined 2.8 percent and imports rose 2.4 percent in December. The Commerce Department also reported retail inventories increased 0.9 percent in December after falling 0.4 percent in the prior month. Retail inventories, excluding motor vehicles and parts, the component that goes into the calculation of gross domestic product rebounded 1.0 percent in December after dropping 0.9% in November.
The trade data added to weak December reports on retail sales, housing starts and business spending plans on equipment. It could prompt economists to cut fourth-quarter GDP estimates, currently around a 2.0 percent annualized rate. The government will publish the fourth-quarter GDP report on Thursday.
