US Trade Deficit Widens; Exports Fall To Four-Year Low

By Justin Kirschner

The US trade deficit widened in December as exports hit a four-year low, according to numbers released on February 5. The trade gap rose 2.7% in December to $43.4 billion, up from the newly-revised November deficit of $42.2 billion. December exports were $181.5 billion, the lowest monthly total since January 2012. Why the recent tumble? It's likely because of a generally weak global economy coupled with a strong dollar that made American goods and services comparatively more expensive on the global market. With the Federal Reserve likely to gradually increase interest rates, and the Fed’s foreign counterparts likely to push their domestic currencies in the opposite direction, the stronger US dollar will likely make US goods and services more expensive overseas throughout this year.