By Courtney SchlissermanJan. 12 (Bloomberg) -- The trade deficit in the U.S. widened in November more than anticipated as imports climbed faster than exports, pointing to a rebound in global demand that is fueling growth.
The gap expanded 9.7 percent to $36.4 billion, the highest level since January, from a revised $33.2 billion in October, Commerce Department data showed today in Washington. Imports increased 2.6 percent, reflecting a jump in oil prices, while exports rose to the highest level in a year.
Spending by American companies and consumers will continue to push up imports, while a 12 percent drop in the dollar since early March and growing economies overseas mean U.S. sales abroad may also improve. China’s move to cool its economy by raising bank reserve requirements caused stocks to tumble worldwide.
“There’s continued strong export growth ahead,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “On the import side, it’s logical that if U.S. companies are no longer running down their inventories that they’re going to need to import more.”
Stocks dropped, depressed by lower-than-anticipated earnings at Alcoa Inc. and China’s actions. The Standard & Poor’s 500 Index was off 0.7 percent to 1,139.52 at 11:14 a.m. in New York.
Economists forecast the deficit would widen to $34.6 billion from a previously estimated $32.9 billion in October, according to the median of 76 projections in a Bloomberg News survey. Estimates ranged from gaps of $31 billion to $38.2 billion.
Excluding the influence of prices, which are the figures used to calculate gross domestic product, the trade gap increased to $40.7 billion in November from $38.3 billion the prior month. The average gap for the quarter so far, at $39.5 billion, is little changed from the third-quarter average of $39.4 billion, indicating trade will not have much influence on economic growth in the last three months of the year.
A rebound in global growth along with the dollar’s decline from a five-year high on March 5 against a basket of currencies from the nation’s biggest trading partners are fueling global demand for goods from companies like United Technologies Corp. and United Parcel Service Inc.
Exports increased 0.9 percent, the seventh consecutive gain, to $138.2 billion in November, reflecting increasing demand overseas for food and American-made automobiles and semiconductors.
Soybeans to China
Demand from China for American goods climbed to a record $7.3 billion, led by surging purchases of soybeans due to a drought in Argentina, according to the Commerce Department. The increase caused the U.S. deficit with the Asian nation to fall 11 percent to $20.2 billion.
American-made automobiles and parts, semiconductors and industrial machines were also in demand globally in November, today’s report showed. The increase in vehicle sales mainly reflects cross-border trade with Canada and Mexico to satisfy North American production.
United Technologies, the Hartford, Connecticut-based maker of Pratt & Whitney jet engines and Otis elevators, last month forecast 2010 per-share profit would increase in line with analyst estimates because of cost cuts and growth in emerging markets.
Contracts in Singapore
The company, which garners more than 60 percent of sales outside the U.S., sees improvement in regions including Asia, Chief Executive Officer Louis Chenevert told investors at a meeting on Dec. 10. The Otis unit announced two contracts Dec. 8 to supply, install and maintain 1,300 elevators in Singapore public housing.
Manufacturing in the U.S. expanded in December at the fastest pace in more than three years, the Institute for Supply Management said Jan. 4. Other reports showed factories in Europe and in China also strengthened last month.
Another report today showed confidence among U.S. small businesses decreased in December as the outlook for sales dimmed. The National Federation of Independent Business optimism index fell to 88, the lowest level in five months, the Washington-based group said.
The report signals that larger companies, which are more likely to benefit from growing global demand, are leading the U.S. economic recovery, said John Ryding, chief economist at RDQ Economics in New York.
“If this conjecture turns out to be correct, it could be another factor hampering the decline in unemployment, given the importance of small businesses to the job creation process,” Ryding said in a note to clients.
The need to prevent inventories from falling even more as sales improve, and the global economic rebound, which is pushing up commodity costs, are contributing to the increase in imports.
Imports advanced 2.6 percent to $174.6 billion. Today’s report estimated petroleum prices rose to $72.54 a barrel in November, the highest level since October 2008. The increase in costs more than offset a drop in volumes as the U.S. imported 245 million barrels in November, the fewest since February 1999.
Americans also bought more consumer goods, computers and telecommunications equipment from overseas, signaling a revival in overall demand and business investment.
To contact the reporter on this story: Courtney Schlisserman in Washington at firstname.lastname@example.org