November trade defict hits $47.8 billion

WASHINGTON (AP) ? The U.S. trade deficit widened in November for the first time in five months. Exports fell for a second straight month while imports rose to an all-time high, driven by rising demand for oil and foreign-made cars.

The Commerce Department said Friday that the deficit increased 10.4 percent to $47.8 billion, the highest level since June.

Exports, which had hit a record high in September, dropped 0.9 percent in November to $177.8 billion. Fewer shipments of autos and capital goods, such as aircraft and machinery, were the key reason.

Imports rose 1.3 percent to a record $225.6 billion. A key reason for the rise was a spike in global oil prices, which surged above $100 a barrel in November.

A decline in exports weakens U.S. growth. And exports could drop even further in the months to come.

Europe's debt problems will likely trigger a recession in the region, which would slow demand for American-made goods. Europe purchases one-fifth of U.S. exports.

The trade deficit hit a 2011 peak of $52.1 billion before it fell for four straight months. That helped boost economic growth because foreign nations were buying more American goods.

Exports hit an all-time high of $180.6 billion in September, reflecting healthy sales of American-made cars and trucks in foreign markets.

Higher exports lead to more U.S. jobs and higher consumer spending, which boosts economic growth.

The U.S. economy is starting the new year with momentum. The job market looks brighter. Consumer confidence is rising. And U.S. factories are coming off their best month since slumping last spring, in part because of supply disruptions caused by Japan's earthquake.

Still, the recovery is subject to setbacks and Europe's debt crisis is a significant concern because of its impact on exports.

The U.S. is looking for new markets to sell its goods. In 2010, President Barack Obama set a goal of doubling U.S. exports by 2015 as a way of promoting jobs in a tough economy.

Two months ago, Congress approved three long-stalled free trade agreements with South Korea, Colombia and Panama. By removing trade barriers, the administration says the free trade deals will boost U.S. exports by $13 billion a year.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-01-13-Trade%20Deficit/id-2fd143da5cfc45959ff5b5da1f269911

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