U.S. trade deficit widens in October

The numbers: The U.S. trade deficit widened by 1.7% in October, the Commerce Department said Friday.

The trade gap widened to $63.1 billion in October from a revised $62.1 billion in the prior month. The forecast of economists polled by MarketWatch expected a deficit of $64.7 billion.

What happened: Both imports and exports had strong gains in October. The goods deficit rose by $600 million in October and the services surplus narrowed.

Year-to-date, the trade deficit is 9.5% above the same period in 2019.

Big picture: There has been a sharp decline in trade activity in the wake of the global coronavirus pandemic. Exports and imports are roughly $300 billion below their levels of last October.

The widening of the deficit shows the power of the U.S. consumer to purchase goods from around the world.

Former U.S. Treasury Secretary Larry Summers is worried that the global economy will come to rely on U.S. consumer demand to fuel growth. The resulting trade imbalance “could mushroom with serious domestic political consequences,” he said. The incoming Biden administration is sure to push for countries like Germany and South Korea to increase demand.

Market reaction: Stocks were set to open higher Friday even after a soft November job report. The Dow Jones Industrial Average DJIA, +0.51% rose 85 points on Thursday.

Source: marketwatch

U.S. Added 245,000 Jobs Last Month as Hiring Slowed

U.S. job growth slowed sharply in November, suggesting the labor-market recovery is losing steam amid a surge in coronavirus cases and new business restrictions.

Employers added 245,000 jobs last month, less than half the 610,000 jobs added in October, the Labor Department reported Friday. The unemployment rate edged down slightly to 6.7% in November from 6.9% a month earlier.

November marked the seventh consecutive month of job gains at a steadily cooling pace. The labor market has now regained slightly more than half of the 22 million jobs lost at the onset of the pandemic.

Employers boosted jobs in the transportation and warehousing sectors last month, likely reflecting holiday hiring for e-commerce roles. Employment declined in government and in the retail category that includes bricks-and-mortar stores.

The U.S. economy overall has recovered much of the ground lost earlier this year, even though the expansion has slowed since the third quarter’s rapid rebound. U.S. consumers boosted their spending in October for the sixth straight month, and new applications for unemployment benefits—a proxy for layoffs—fell last week after a recent jump.

Source: WSJ

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