The U.S. trade deficit rose 14-year high in November, as companies increased imports to boost inventories, offsetting higher exports.
The Commerce Department said on Thursday the trade deficit widened 8.0% to $68.1 billion in November, the highest level since August 2006. The deficit in October was unrevised at $63.1 billion.
Both Increased imports and widening trade deficit are a burden on Gross Domestic Product (GDP), yet, it is likely that most of the imports will end up in warehouses, and boosting stocks to counteract the damage to GDP from imports.
The U.S. economy is expected to expand around 5%, year-on-year in the fourth quarter, as the main rise in GDP is seen from investing in inventory.
The economy grew at a historic pace of 33.4% in the third quarter after contracting an average of 31.4% in the April-June, the lowest since the government began keeping records in 1947.
U.S. Imports jumped by 2.9% to $252.3 billion, and Goods imports accelerated by 3.0% to $214.1 billion, the highest since mid 2019. On the other hand, exports rose by 1.2% to $184.2 billion, and Goods exports rose by 1.0% to $127.7 billion.
