The U.S. trade deficit jumped to $68.1 billion in November, the highest monthly deficit in 14 years, as a surge in imports overwhelmed a smaller increase in exports.
The November gap between what America buys from abroad compared to what it sells abroad rose by 8% from the October deficit of $63.1 billion, the Commerce Department said Thursday.
The increase reflected a 2.9% increase in imports of goods and services to $252.3 billion on a seasonally adjusted basis. That jump swamped a 1.2% rise in exports which totaled $184.2 billion in November.
Through the first 11 months of 2020, the deficit stands at $604.8 billion, 13.9% higher than the same period in 2019. President Donald Trump has insisted that his get-tough trade policies with the rest of the world would shrink the deficit and bring back American jobs.
The politically sensitive deficit with China rose 1.9% to $30.7 billion in November and totaled $283.6 billion for the first 11 months of 2020. That was a drop of 11.5% from the same period in 2019, reflecting in part the higher tariffs the Trump administration imposed on Chinese goods as the world’s two largest economies engaged in a tit-for—tat trade war.
The monthly deficit in goods and services of $68.1 billion was the largest imbalance since August 2006. The deficit in just goods totaled a record $86.4 billion in November.
Michael Pearce, senior U.S. economist at Capital Economics, said that the rising trade deficit would act as a drag on economic growth in the fourth quarter. He predicted the economy, as measured by the gross domestic product, would expand at an annual rate of 3% in the October-December period.