The US trade deficit posted its biggest drop in nearly 14 years in November, as slowing domestic demand amid higher borrowing costs put pressure on imports.
The trade deficit fell 21.0% to $61.5 billion, the lowest level since September 2020, the Commerce Department said on Thursday (5). The percentage decline was the biggest since February 2009.
Imports fell 6.4% to $313.4 billion, with goods down 7.5% to $254.9 billion. Imports of consumer goods were the lowest since December 2020.
Last year, the Federal Reserve raised its benchmark interest rate by 425 basis points from nearly zero to a range of 4.25% to 4.5%, the highest since late 2007.
Last month, it projected at least an additional 75 basis points of increases in borrowing costs through the end of 2023. Higher interest rates boosted the dollar, which appreciated 5.4% against the currencies of the United States’ main trading partners in the last year.
The strength of the dollar is making US-made products less competitive in global markets. Monetary policy tightening by global central banks is also eroding demand.
Exports fell 2.0% to $251.9 billion, with merchandise shipments falling 3.0% to $170.8 billion. But exports of motor vehicles, parts and engines were the highest since August 2019.
Source: CNN Brasil
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