"This is way off expectations and clearly volatile, but the takeaway is this is a big add to Q4 GDP"
- CRT Capital Group economist David Ader
The United States' trade deficit shrank in December to its lowest level in almost three years, the Commerce Department said on Friday. Trade deficit fell by 21% to a seasonally adjusted $38.5 billion from $48.6 billion in November, posting it's the smallest trade gap since January 2010. Analysts, however, expected a deficit of $46 billion. The data suggest that the government can increase its growth forecast for the last quarter of 2012 from a previous reading, which showed the world's largest economy contracted 0.1%. The report also showed that American exports surged by $8.6 billion during the month, imports fell by 12%. For the year, the trade gap fell 3.5% to a deficit of $540.4 billion from $559.9 billion in 2011.
"This is way off expectations and clearly volatile, but the takeaway is this is a big add to Q4 GDP," said CRT Capital Group economist David Ader.
"Trade data for December paint a reassuring and encouraging picture of the U.S. economy at the end of last year," said Chris Williamson, chief economist at Markit.
"Congress and the administration must take on currency manipulation," said Scott Paul, president of the Alliance for American Manufacturing.
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