Washington, Dec. 30 (BNA): The US trade deficit in goods spread to the widest ever in November, as imports of consumer goods jumped to a record level ahead of the second consecutive shopping season due to the novel coronavirus, along with industrial supplies, while industrial supplies slumped. exports. After historic gains a month ago.
Economists said the goods trade gap reported by the Commerce Department on Wednesday is likely to remain historically high as long as the coronavirus pandemic continues. The emergence of the rapidly spreading Omicron variant of COVID-19 that drove case numbers in the United States and the world to a record high this week may worsen it in the near term if it curbs American consumer spending on services and restores demand for imported goods. mentioned.
Omicron also stands as a downside risk in the housing market. Wednesday’s pending home sales reading also showed an unexpected decline in November, and while this data largely preceded Omicron’s rise in the US, a new, highly contagious alternative that could curb home sales in the near term, is the National Association of Realtors (National Association of Realtors). National Realtors (NAR) said.
Statistics Bureau data showed that the goods trade deficit widened last month by 17.5 percent to $97.8 billion, from $83.2 billion in October. That exceeds the previous record deficit set in September of $97 billion and may dampen optimism that trade may finally add to US economic growth this quarter for the first time in more than a year.
Imports rose 4.7% as industrial supplies led the way with an increase of $5.7 billion to $63.2 billion, followed by consumer goods by $2.9 billion to just $67 billion as retailers rush to fill store shelves before Christmas. Both were record levels.
“The emergence of the Omicron variable could increase demand for imported goods if services activity is restricted” in the first quarter of 2022, Nancy Vanden Houten, chief economist at Oxford Economics, wrote after Wednesday’s report.
Meanwhile, merchandise exports fell 2.1%, with an overall weakness outside of a 4.3% increase in food exports. The decline was driven by a $1.4 billion decrease in industrial supplies in capital goods and a $1.3 billion decline.
Vanden Houten said the global rise in coronavirus cases to a record level in recent days – including a record number of cases in the US – could weigh on global demand in the coming months, threatening a wider trade gap.
The so-called advanced indicators report also showed wholesale inventories rose 1.2% last month, while retail inventories rose 2.0%. Retail inventories, excluding autos, which go into gross domestic product, rose 1.3% to $465.2 billion, the latest in a string of record readings.
The economy grew at an annualized rate of 2.3% in the third quarter, down from earlier in the year, but activity rebounded in the fourth quarter with consensus among economists about a 6% growth rate in the final. Three months of 2021.
Trade has been a drag on GDP growth for five straight quarters, while inventories increased production in the third quarter.
Earlier this month, the Commerce Department reported a sharp decline in the overall trade deficit – including services – for October, which led to some optimism that trade could contribute to improved output in the fourth quarter. A major reversal to a record gap in commodity trading in November may prompt a rethink.
Economists at Action Economics pulled back their estimate of fourth-quarter GDP growth to 6.5% from 7.0%, as exports are now seen as subtracting from growth rather than adding to it as previously expected. Meanwhile, economists at JPMorgan and Goldman Sachs left their estimates unchanged at 7%.
Meanwhile, US-owned home purchase contracts fell unexpectedly in November, as falling home stocks and high prices hamper activity and the explosion of novel coronavirus cases poses a risk to the housing market heading into 2022.
The NAR said its pending home sales index, based on contracts signed, fell 2.2% last month to 122.4. Pending home sales were lower in all four regions.
Economists polled by Reuters had forecast contracts, which usually become final sales after a month or two, would rise 0.5% in November.
“There were fewer pending home sales this time around, which I’ll attribute to lower housing supply, but also to buyers’ reluctance about home prices,” said Lawrence Yun, NAR’s chief economist.
Looking ahead, Yoon said Omicron poses a risk to the performance of the housing market, as buyers and sellers are sidelined, and home construction is delayed.
MI