Analysts said the larger-than-expected trade deficit for December would likely reduce estimates of growth in the October-December quarter. The government had initially estimated fourth-quarter growth at a 3.2 per cent annual rate. But economists at Barclays say the bigger December gap could reduce that estimate to a 2.8 per cent rate.
The trade deficit rose to $38.7 billion in December, a 12 per cent increase over November, the Commerce Department said Thursday. Exports slipped 1.8 per cent to $191.3 billion. Imports rose 0.3 per cent to $230 billion.
For all of 2013, the deficit dropped 11.8 per cent to $471.5 billion. That was the lowest level since the Great Recession caused the deficit to shrink in 2009.
U.S. exports rose 2.8 per cent as an improving global economy benefited American manufacturers. An energy production boom also lifted U.S. petroleum exports to a record. Imports dipped 0.1 per cent.
A smaller trade deficit can boost economic growth. U.S. manufacturers gain from rising export sales while U.S. consumers are buying fewer foreign-made products.
A domestic energy boom has boosted exports and reduced America's dependence on foreign oil. U.S. petroleum exports were up 10.9 per cent in 2013 to an all-time high of $137 billion. Imports were down 11 per cent to $369.3 billion. The drop in imports was helped by falling global oil prices.
By country, the United States ran another record trade deficit with China: $318.4 billion for the year, an increase of 1 per cent from 2012. The United States has recorded its largest trade deficit with China each year since 2000, when that country supplanted Japan as the nation with the largest trade imbalance with the United States.
That is likely to add to pressure on Congress and the Obama administration to crack down on what critics see as China's unfair trade practices. U.S. manufacturers contend that China is keeping its currency undervalued against the dollar by as much as 40 per cent in order to gain trade advantages. A weaker Chinese currency makes Chinese goods cheaper for U.S. consumers and American products more expensive in China.
The U.S. deficit with the 28-nation European Union rose 8 per cent to a record $125.1 billion in 2013.
Many analysts say 2014 may be the year that the economy finally ramps up to stronger growth of around 3 per cent. In 2013, the economy grew at a sub-par 1.9 per cent rate.
The hope is that an improving global economy will lift U.S. exports. But there have been worries recently stemming from plunging currency values in a number of emerging market economies. Investors have grown worried about what impact the Federal Reserve's decision to lower its support for the U.S. economy might have on emerging market nations.