The US 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. Other data from the Commerce Department on Wednesday showed new orders for US-made goods barely rose in December and business spending on equipment was much weaker than previously thought, pointing to a softening in manufacturing activity.
The US economy slowed less than expected in the third quarter as a tariff-related drop in soybean exports was partially offset by the strongest consumer spending in nearly four years, keeping it on track to hit the Trump administration’s 3% growth target this year.
The U.S. trade deficit rose to a five-month high in July, with the politically sensitive gap with China hitting a record high, which economists said could embolden the Trump administration to aggressively pursue its “America First” agenda.
US trade deficit widened to its highest level in 18 months in May, driven by demand for imported cars, computers and clothing. The deficit increased by 4.8% to 42.3 billion US dollars, the largest since November 2008, Commerce Department data showed.