Larger than expected US trade deficit sparks fears over growth

A BIG jump in oil imports swelled the US December trade deficit to $40.2bn (£25.8bn), an unexpected widening that suggested US economic growth was not as strong as initially thought in the fourth quarter.

The Commerce Department’s report published yesterday, showing a 10.4 per cent jump in the trade gap, came as both US exports and imports recorded large gains for the month.

The bigger-than-expected deficit will “shave a couple of tenths off” the US government’s estimate that the economy grew at a 5.7 per cent annual rate during October to December, said Nigel Gault, chief US economist at IHS Global Insight.

“But it is hard to describe the trade figures as bad news, since they show a continuing robust rebound in world trade,” he said.