U.S. consumer demand for goods and an easing of supply-chain constraints likely drove a surge in imports in November, pushing the trade deficit to a record.
Economists surveyed by The Wall Street Journal estimate that the U.S. trade deficit widened in November to $81.5 billion. Backlogs at U.S. ports showed signs of easing in the fall, helping boost imports, while consumer spending was solid early in the holiday shopping season.
“It’s the ongoing strength of U.S. retail spending that’s one of the big drivers of this,” said Andrew Hunter, senior U.S. economist at Capital Economics Ltd., referring to strong demand for consumer goods manufactured overseas.
The Commerce Department is set to release data on international trade in goods and services for November at 8:30 a.m. Thursday.
Easing Covid-19 restrictions ahead of the surge from the Omicron variant and rebounding demand overseas also have started to benefit U.S. exports, particularly of energy and agricultural commodities. Economists, however, say demand for imports likely outstripped exports by a large amount, leading to a wider trade deficit.
After collapsing during the pandemic, global trade has roared back, pushing the U.S. trade deficit to record levels as the pandemic continues. High demand coupled with transportation and delivery challenges, such as shortages of port and warehouse workers, have crimped goods trade in recent months. But signs are mounting that supply-chain disruptions are beginning to dissipate.
The Institute for Supply Management this week in its December manufacturing report said that “supply-chain performance is moving toward a more appropriate balance with demand.”
Factories in Europe and the U.S. also reported a further easing of supply-chain woes and related cost increases as 2021 drew to a close, although the spread of Omicron world-wide threatens to worsen shortages of labor and supplies.
Still, congestion at U.S. ports along with supply chains snarled by the Covid-19 pandemic remain wild cards for businesses and consumers, economists say, with trade expected to continue to be a challenge for businesses in the months ahead.
“Input-cost inflation is at a 10-year high and labor shortages and other issues are causing disruptions across our supply chain, from our suppliers to manufacturing to distribution,” General Mills Inc. Chief Executive Jeff Harmening said during a Dec. 21 earnings call. “These disruptions are driving down service levels and driving up costs above and beyond inflation throughout the industry,” Mr. Harmening added.
—Anthony DeBarros contributed to this article.
Write to Harriet Torry at [email protected]
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