The US trade deficit probably widened in December for the first time in four months as the cost of imported oil climbed, economists said before a report this week.
The gap grew to US$40.2 billion from the US$38.3 billion shortfall in November, according to the median of 58 estimates in a Bloomberg News survey ahead of the US Commerce Department’s report on Friday. Other figures may show consumer confidence climbed this month and claims for jobless benefits fell.
In addition to oil, imports may have also been boosted by the need to rebuild inventories at the end of the year after US consumers spent at a faster clip in the fourth quarter. At the same time, manufacturers like Caterpillar Inc are enjoying sales gains overseas as demand picks up from customers in emerging economies, including China and Brazil.
“In order to rebuild inventories of consumer goods, you would expect to see stronger import growth,” said Jay Bryson, a global economist at Wells Fargo Securities Inc in Charlotte, North Carolina. “Export growth remains pretty strong as most trading partners are experiencing solid rates of growth.”
Consumer spending, which accounts for 70 percent of the US economy, rose at a 4.4 percent annual pace in the fourth quarter, the biggest gain since in four years, according to US Commerce Department figures.
Caterpillar, the world’s largest maker of construction equipment, posted fourth-quarter profit that topped analysts’ estimates as sales advanced in China, Australia and Latin America. The Peoria, Illinois-based company said this year’s sales would top US$50 billion after coming in at US$42.6 billion last year.
“Sales are improving in every region, and are at or near records in the developing world,” Mike DeWalt, director of investor relations at Caterpillar, said on a Jan. 27 teleconference. “Over the past quarter, we’ve become somewhat more positive about economic growth in the developed economies of North America, Europe, and Japan.”
A product of stronger global growth is higher commodities costs. The US’ energy bill may have increased at the end of the year, boosting the value of imports in the Commerce Department’s trade report. The price of imported petroleum climbed 3.9 percent last year from the prior month, and was up 14 percent from a year earlier, according to figures from the US Labor Department.
Oil prices also partly reflect a weaker US dollar, which is down 3.8 percent in the year to Jan. 28 against a basket of currencies of the US’s leading trading partners. The US dollar’s decline makes US-made goods cheaper for buyers abroad, boosting exports and helping generate more orders to US manufacturers.
US President Barack Obama, who has set a goal of doubling US exports by 2014, said last month in his State of the Union address that the US has made progress.
“Already, our exports are up,” Obama said on Jan. 25. “Recently, we signed agreements with India and China that will support more than 250,000 jobs here in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs.”
Also on Friday, the Thomson Reuters/University of Michigan consumer sentiment index may have increased as the economy showed more signs of picking up and stocks increased. The preliminary reading for this month rose to 75 from 74.2 last month, according to the Bloomberg survey median.
A Labor Department report on Thursday may show fewer Americans filed initial jobless claims. New applications for unemployment benefits probably declined by 5,000 to 410,000 in the week that ended Saturday, according to the Bloomberg survey.
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