he U.S. trade deficit increased more than forecast in December as the price of imported petroleum rose and purchases of foreign cars and consumer goods reached records.
The gap between imports and exports widened 5.3 percent to $61.2 billion in December, from a 16-month low of $58.1 billion in November, the Commerce Department said today in Washington. For all of 2006, the trade imbalance expanded to a record $763.6 billion.
Higher petroleum prices in December increased the value of oil and gas imports into the U.S. Prices have since receded, and economists expect economic growth overseas, combined with the continued weakness in the dollar, will boost demand for U.S. products and keep the trade gap in check.
``The big picture is exports are growing, but in '06, imports grew faster, particularly consumer goods from China,'' said Chris Low, chief economist at FTN Financial in New York. ``We are looking for a small downward revision'' in fourth- quarter economic growth based on today's figures, he said.
Now we understand why the dollar chart for the last 4-years is in a big downtrend.