The U.S. trade deficit continued to grow in December as the import-export gap widened to record highs in 2021, the Census Bureau reported Tuesday.
The trade deficit grew by 1.8% in December 2021 to $80.7 billion, the Census Bureau announced Tuesday, $1.4 billion above the revised figure from November 2021.
The full-year deficit for 2021 soared 27% to $859.1 billion, far exceeding the 2020 total deficit figure of $676.7 billion in 2020, according to the Census Bureau. Exports grew by $3.4 billion to $228.1 billion in December, while imports increased by $4.8 billion to $308.9 billion for the month.
The trade deficit soared to record levels in 2021, with the goods deficit topping $1 trillion for the first time as Americans continued to spend heavily on imports during the pandemic https://t.co/6YT8asIHzN
— Ana Swanson (@AnaSwanson) February 8, 2022
The widening trade deficit reflects a recovering U.S. economy as consumers continue to spend more on imported goods such as computers, cell phones, household appliances and automobiles, according to the Census Bureau. (RELATED: Jobs Report Beats Expectations Despite Surging Omicron Cases)
“It’s unlikely that the trade deficit will significantly unwind its Covid-related expansion until the pandemic is sustainably contained domestically and abroad,” Mahir Rasheed, U.S. economist at Oxford Economics, said in a statement obtained by the Daily Caller News Foundation. “However, we expect gradually warming growth and stronger services activity to boost export growth this year while import demand moderates.”
The widening of the import and exports suggest that global supply bottlenecks are easing, Andrew Hunter, senior U.S. economist for Capital Economics, told The Wall Street Journal.
“Trade in both directions appears to have benefited from easing congestion at U.S. ports towards the end of last year,” Hunter wrote in a note obtained by the WSJ. The increasing deficit will continue to decelerate the overall economic growth rate during the first quarter of 2022, Hunter reportedly said.
Meanwhile, the U.S. Gross Domestic Product (GDP) grew faster than anticipated in the fourth quarter of 2021, showing 6.9% growth on a year-over-year basis, a 2.3% increase from the third quarter figure, the Commerce Department announced on Jan. 27.
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