Trade gap widened “unexpectedly” in November by almost 16%, prices declined in December

Today’s big economic indicator gave a pessimistic view of the start of the new year. The international trade gap jumped almost 16% in November, rising $6.6 billion to $48.7 billion. Both imports and exports increased, but the prices for both fell in December, a potential portent of recession:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total November exports of $182.6 billion and imports of $231.3 billion resulted in a goods and services deficit of $48.7 billion, up from $42.1 billion in October, revised. November exports were $1.7 billion more than October exports of $180.8 billion. November imports were $8.4 billion more than October imports of $222.9 billion.

In November, the goods deficit increased $6.6 billion from October to $65.7 billion, and the services surplus was virtually unchanged from October at $17.0 billion. Exports of goods increased $1.6 billion to $129.3 billion, and imports of goods increased $8.2 billion to $195.0 billion. Exports of services increased $0.1 billion to $53.2 billion, and imports of
services increased $0.2 billion to $36.3 billion.

The goods and services deficit decreased $0.1 billion from November 2011 to November 2012. Exports were up $5.8 billion, or 3.3 percent, and imports were up $5.7 billion, or 2.5 percent.

CNBC’s Jeff Cox describes the mixed bag:

The U.S. trade deficit unexpectedly grew in November, a drag on economic growth, although the gap’s widening was driven by a surge in consumer goods imports, which gives a positive signal for consumer spending.

Also, prices declined for U.S. imports and exports in December, a sign of the chill in the global economy that is hurting exporters but giving respite to U.S. drivers stung by high fuel prices. …

Analysts were expecting the deficit to shrink to $41.3 billion, so the report could lead some economists to trim their forecasts for economic growth in the fourth quarter.

Meanwhile, CNN reports this morning that corporate layoffs may be looming:

The American Express job cuts look especially gloomy.  As Reuters notes, they usually occur as the economy slides into recession, although Amex says that they’re looking at other factors:

Credit card company American Express Co said it would cut about 5,400 jobs, or 8.5 percent of its workforce, as it restructures its business and pay legal bills. …

American Express tends to cut staff at the beginning of recessions. But CEO Kenneth Chenault, speaking to stock analysts after the announcement Thursday, said spending with its cards continues to grow.

“This is not driven by our view of the macro environment,” he said.

The company said the job cuts will happen over the year and come even as it hires some new employees and invests in more online customer service. The current workforce of 63,500 people will be about 4 to 6 percent smaller by the end of 2013.

Either way, they’re reducing staff by 4-6%, and they aren’t going to be the only company to do so.  Don’t expect robust economic growth from Q4 when the report comes later this month, in other words, and we may need to expect less than that in Q1.

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