Source: Economics Group of Wells Fargo Bank, N.A.
Summary
International trade data came in as anticipated to end 2023, but upward revisions to November’s data caused the deficit to widen modestly to $62.2 billion in December. Overall, the deficit shrank over the course of 2023 amid a normalization in trade flows.Trade Deficit Widens in December but Narrows for the Year
The U.S. trade balance declined to -$62.2 billion in December (chart). That was roughly in line with expectations, but it suggests a modest widening in the deficit to end last year rather than the anticipated narrowing which would have taken place if it were not for upward revisions to November data. The trade deficit was about $1.3 billion smaller in November than previously reported.
Exports rose by nearly $4 billion during December, which was a touch slower than the $4.2 billion gain in imports. Trade in industrial supplies was a large source of flows in December, accounting for most of the export growth and a decent chunk of imports (chart). Consumer goods imports were also solid amid an array of products, consistent with the strong end to last year for domestic demand. The December international trade report largely confirms what we learned from last month’s Q4-GDP data; net exports boosted growth for Q4 and 2023 as a whole.