Tallahassee Journal

Trade deficit widened sharply in December

Trade deficit widened sharply in December

The U.S. trade deficit widened substantially to its highest level in more than two years in December as the strong dollar hurt exports and bolstered imports. The trade gap jumped $6.8 billion, or 17%, to $46.6 billion, highest since November 2012. Economists expected a decline to $38 billion.635587254998753065-XXX-MG-3521

Exports fell $1.5 billion to $194.9 billion as shipments of industrial supplies and materials, along with petroleum products, declined. Imports rose $5.3 billion to $241.4 billion on rising deliveries of industrial supplies, crude oil and other petroleum products.

The strong dollar hobbles exports by making US goods more expensive for overseas buyers. It boosts imports by making foreign products cheaper for US consumers. For all of 2014, the trade deficit increased $20.7 billion to $505 billion.

The wider-than-expected gap in December is expected to prompt the government to revise down its 2.6% annualized estimate of fourth-quarter economic growth by as much as four tenths of a percentage point, says Jim O’Sullivan, chief US economist at High Frequency Economics.