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- Mar 1, 2013
- Updated: 11:36pm
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US GDP fall overstated, December export figures show
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The US economy probably expanded slightly in the fourth quarter, according to data yesterday that suggested a drop in gross domestic product reported by the government last week was overstated.
The trade deficit narrowed to its lowest point in nearly three years in December after a drop in oil imports and a surge in exports.
The trade gap narrowed to US$38.5 billion during the month, commerce department data showed yesterday.
A separate report from the commerce department showed wholesale inventories unexpectedly declined in December.
Taken together, the two reports suggest the US government could revise upward its advance reading for fourth-quarter GDP, which showed the economy contracted at an annual rate of 0.1 per cent.
The decline in GDP was driven by an expected drop in exports, smaller gains in inventories and a plunge in government spending on the military.
Barclays said even with December's decline in wholesale inventories, GDP probably expanded 0.3 per cent in the fourth quarter thanks to the higher export numbers in yesterday's report.
US exports increased US$8.6 billion in December, boosted by sales of industrial supplies, including a US$1.2 billion rise in exports of non-monetary gold.
In a reflection of the current boom in the US in the output of oil and natural gas, petroleum exports rose by nearly US$1 billion during the month to a record level.
A fall in petroleum imports led overall purchases from abroad to decline US$4.6 billion in December. For the entire year, the country's imports of crude oil fell to their lowest levels since 1997 in terms of volume.
Prices of US stocks rose as investors were impressed by a batch of strong trade data, which included the US figures as well as readings showing stronger exports and imports in China during January. Prices for US government debt fell.
While the overall trade deficit shrank, the deficit grew with China during the year.
However, US imports last year from China increased to a record high, so did US exports to the country. The December trade deficit with China for goods, which was not seasonally adjusted, narrowed by US$4.5 billion on a drop in imports.
