The US trade deficit unexpectedly jumped 10.6 per cent in December to a record $44.2 billion, as the seemingly insatiable US desire for imports expanded and exports slumped, the US government said today.
The monthly trade gap far exceeded the average estimate of $38.8 billion by analysts before the report and pushed the tally for the year to a record $435.2 billion, as US exports declined for the second year.
In a sign the US economy continues to outperform its major trading partners, imports increased 1.7 per cent to $125.4 billion in December while exports declined 2.6 per cent to $81.2 billion.
The biggest factor behind the monthly export decline was a $2.2 billion drop in capital goods exports.
On an individual country basis, the U.S. trade deficit with Germany set a record in December at $4.1 billion, aided by a record $6.3 billion in imports. The trade gap with Japan, at $7.1 billion, was the highest since October 2000, when it reached the same level.
The US trade deficit increased 21.5 per cent in 2002, propelled by record high imports from China and Western Europe. Bilateral trade deficits with China, Western Europe, Mexico, and South and Central America also set records in 2002.
Imports from China surged to $125.2 billion, surpassing Japan as the United States' largest import partner behind Canada and Mexico.
While US exports to China also set a record last year, they totalled only $22.1 billion, pushing the bilateral trade deficit to a record at $103.1 billion.
Mr Greg Mount, deputy chief economist at Bank One, said the higher trade deficit with Europe was due to a combination of forces including the strong US dollar and a slump in US productivity in 2001.
With the dollar now having lost some of its value against the euro, and US productivity on the upswing, the trade gap with Europe should narrow in 2003, he said.