Trade Deficit Sets Record; GDP Growth Estimates Slide

By John S. McClenahen Economists expected the U.S. to post a record trade deficit for goods and services in November 2002. But few expected it to be as high as the $40.1 billion shortfall the U.S. Commerce Department reported on Jan. 17. The U.S. imported $123.3 billion in goods and services during November and exported $83.2 billion. November imports were $5.8 billion more than October imports of $117.5 billion. U.S. exports in November were $900 million more than October exports of $82.3 billion. This poor trade performance means that U.S. GDP probably grew at an annual rate of less than 1% in last year's final calendar quarter, significantly below the already weak 1.5% to 1.8% many economists have estimated. Both Maury Harris, chief U.S. economist at UBS Warburg, New York, and David Rosenberg, chief North American economist at Merrill Lynch & Co., also in New York, now estimate fourth-quarter GDP growth at only 0.8%.

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