The United State’s trade deficit has risen to its highest level in 14 years in November 2020, as businesses boosted imports to replenish inventories, offsetting rise in exports.
While the deficit in October was unrevised at $63.1 billion, that of November widened by 8.0% to %68.1 billion, the highest level since August 2006. This is according to a statement by the Commerce Department, as reported by Reuters.
The $68.1 billion trade shortfall was more than the $65.2 billion shortfall forecasted by Economists polled by Reuters.
- Read also; Elon Musk just became the world’s richest person
- FG goes after Dormant bank account balances and Unclaimed dividends
Imports jumped 2.9% to $252.3 billion. Goods imports accelerated 3.0% to $214.1 billion, the highest since May 2019. Exports rose 1.2% to $184.2 billion. Goods exports advanced 1.0% to $127.7 billion.
Rising imports and the resulting widening in the trade deficit are a drag on gross domestic product. But much of the imports likely ended up in warehouses, boosting inventories. The accumulation of inventories is likely to counter the hit to GDP from imports.
The economy is expected to have expanded at around a 5% annualized rate in the fourth quarter, with the bulk of the rise in gross domestic product seen coming from inventory investment. The economy grew at a historic 33.4% pace in the third quarter after shrinking at a 31.4% rate in the April-June period, the deepest since the government started keeping records in 1947.
By; Nnamdi M.