Economic Report: U.S. trade deficit in goods narrows to lowest level in almost two years in November


The numbers: The U.S. international trade deficit in goods narrowed 15.6% to $83.3 billion in November, according to the Commerce Department’s advanced estimate released Tuesday. It is the smallest deficit since December 2020.

In October, the deficit had widened to $98.8 billion from $92.6 billion in the prior month.

Economists polled by Econoday were looking for the deficit to narrow only to a $97 billion deficit in November.

The advanced trade data is expressed in nominal terms, meaning it is not adjusted for inflation. 

The report also showed a 1% gain in wholesale inventories in November. And advanced retail inventories were up 0.1%. Excluding autos, retail inventories were up 1.2%. 

Key details: Both exports and imports fell in November.

Imports shrank 7.6% to $252.2 billion led by consumer goods. It is the lowest level of imports in more than a year.

Exports of goods dropped 3.1% to $168.9 in November led by industrial supplies.

Big picture: Net exports made a positive contribution to third-quarter gross domestic product and the narrowing of the deficit in November means the shrinking deficit could also boost growth in the October-December quarter.

Market reaction: U.S. stocks were mixed on Tuesday with the Dow Jones Industrial Average

rebounding and the S&P 500 index

trading lower. The yield on the 10-year Treasury note

slipped to 3 5%.

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