The numbers: The U.S. trade deficit widened 3.2% in November to $50.5 billion, the highest trade gap since January 2012. Economists polled by MarketWatch had forecast a $50 billion gap.
Imports rose 2.5% to $250.7 billion, the Commerce Department said Friday. Exports rose 2.3% to $200.2 billion. Year-to-date, the deficit is up 11.6% from the same period in 2016.
What happened: The trade gap with China widened to $35.4 billion in November, the highest since September 2015. Adding to the gap, the November average price of imported oil rose to $50.10 a barrel, the highest since July 2015. The rise in imports was led by consumer goods, including cell phones. The gain in exports was led by capital goods, including civilian aircraft.
The big picture: A larger deficit will likely be a drag on fourth-quarter GDP growth. President Trump has vowed to reduce deficits and bring jobs back home, but the U.S. is on track to post an even bigger gap for all of 2017 that could be the largest in five years.
Also read: The latest update to the Trump Scoreboard isn’t terrific
It’s not all bad. Economists see expanding trade activity as a sign of a healthier global economy. And rising imports into the U.S. is a sign that the American economy is healthy.
What they’re saying: “The data are pointing to a sizable drag from net exports in Q4 GDP — potentially more than a point on the growth rate — with imports up more than exports. Domestic final sales have looked strong, however,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
Market reaction: For investors, the December jobs report typically overshadows the trade gap. Stocks opened higher after the government estimated 148,000 jobs were added last month.