The U.S. trade deficit widened in December to its highest level in four months, the U.S. government said on Friday in a report that also showed the annual trade gap expanded nearly 33 percent in 2010 as imports from China hit record levels.
The December trade deficit grew nearly 6 percent to $40.6 billion, just slightly higher than a consensus estimate of Wall Street analysts, as the average price for imported oil leapt to its highest level since October 2008.
Technically it would be a minor drag on GDP (gross domestic product), but I see it more as a sign of stronger consumer health. There is a lot pent-up demand out there and I feel consumers will feel more comfortable in unleashing that demand, said Robert Dye, senior economist at PNC Financial Services in Pittsburgh.
Overall imports of goods and services were also their highest since October 2008, in a sign consumers and businesses are spending more as the U.S. economy picks up steam.
As consumers feel more confident and supported by income growth from an improving labor market situation, we could see more auto imports. We could be in a moderate widening trend in the next few months, Dye added.
Exports of goods and services were the highest since July 2008, the month that they hit their peak before beginning a precipitous drop caused by the global financial crisis.
U.S. markets had little reaction to the report, as traders focused on new proposals from the Obama administration to wind-down government-controlled mortgage buyers Fannie Mae and Freddie Mac .
U.S. goods exports to China grew to a record $10.1 billion in December and also were a record $91.9 billion for the year.
But that strong finish was swamped by record U.S. imports from China of $364.9 billion for the entire year, which pushed the closely watched trade gap with that country to a record $273.1 billion.
Rising oil prices also helped widen the U.S. trade deficit in 2010. The average price for imported oil jumped to $74.66 per barrel, from $56.93 in 2009.
Imports of consumer goods and foods, feeds and beverages also set records in 2010.
Overall, U.S. imports of goods and services grew 19.7 percent in 2010 to $2.33 trillion dollars.
U.S. exports grew 16.6 percent to $1.83 trillion, a pace that if maintained would allow the United States to reach President Barack Obama's goal of doubling exports by 2013.
U.S. exports of services, industrial supplies, consumer goods and petroleum all set records.
The strong services performance pushed the U.S. trade surplus for services to a record $148.7 billion in 2010.
(Additional reporting by Richard Leong in New York; Editing by Andrea Ricci)