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Despite expectations for a slight increase in the trade deficit, it narrowed to $63.2 billion, a decrease from the revised figure of $64.5 billion in October, according to the United States Commerce Department.
Sustained consumer spending has buoyed United States trade, though there were predictions for higher interest rates to impact demand and consequently increase pressure on imports.
Additionally, exports are at risk due to slower growth among major United States trade partners, influenced by the tightening of monetary policy.
In November, US exports decreased by $4.8 billion, totalling $253.7 billion, while imports fell more significantly, decreasing by $6.1 billion to reach $316.9 billion.
Matthew Martin, a US economist at Oxford Economics, noted, “The November trade report signaled a sharp slowdown in exports and imports, with net trade likely to be broadly neutral for fourth quarter GDP growth.”
Looking ahead, consumer spending is predicted to decelerate in future quarters, yet it is anticipated to remain strong enough to “prevent prolonged declines in imports,” as per Martin’s analysis.
He also mentioned that, despite a challenging global environment, exports have performed “comparatively well” and could benefit from a weaker dollar.
A key factor in November’s export reduction was a decrease in goods, including a $3.6 billion reduction in industrial supplies and materials, such as crude oil and non-monetary gold.
Similarly, imports of goods also fell, largely due to a drop in consumer goods imports, including items like mobile phones and pharmaceutical products.
