In an initial estimate that does not include trade in services, the Commerce Department said the country exported $1.2 billion less in November than in October. Imports rose by $2.2 billion during the month. The full trade report for November is due on January 6. "It appears net trade will again be a drag" on economic growth in the fourth quarter, said Michael Gapen, an economist at Barclays in New York.
Further details in the report showed an increase in retail and wholesale inventories in November, which could provide a temporary boost to economic growth. Trump campaigned heavily on promises to reduce America's trade deficit and bring back jobs that moved abroad to countries with lower costs for manufacturing. Working against him could be a stronger US dollar which could weigh on US exporters. The trade deficit for goods widened by $3.4 billion in November to $65.3 billion.
The dollar has surged about 5 percent since Trump won the November 8 presidential election as investors bet wider budget deficits under his presidency will trigger higher inflation and more interest rate increases by the Federal Reserve. On Thursday, the dollar weakened and stocks rose slightly in light holiday-period trading. Separately, initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 265,000 for the week ended December 24, the Labour Department said.
It was the 95th straight week that claims were below 300,000, a threshold associated with a healthy labour market. That is the longest stretch since 1970, when the labour market was much smaller. The department said in a statement there were no special factors affecting claims last week although estimating the data can be more difficult around holiday periods. The department said the actual number of claims was estimated by government staff for 10 states.
Claims for the prior week were unrevised. Labour market strength contributed to the Federal Reserve raising its benchmark overnight interest rate earlier this month by 25 basis points to a range of 0.50 percent to 0.75 percent. The US central bank forecast three rate hikes in 2017. Economists polled by Reuters had forecast first-time applications for jobless benefits falling to 264,000 in the latest week. The claims report also showed the number of people still receiving benefits after an initial week of aid rose 63,000 to 2.10 million in the week ended December 17, the highest since September.