U.S. Trade Deficit Hit Record in 2022

The U.S. posted its largest trade deficit on record last year, as global demand weakened amid high inflation, climbing interest rates, disruptions due to the Ukraine war and the pandemic’s continued effects.

America’s imports exceeded its exports by $948.1 billion in 2022, up 12.2% from 2021, the Commerce Department said Tuesday.


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U.S. imports of goods and services fell in the final two quarters of the year, the department said, and exports fell in the fourth quarter, as commerce slowed around the world. 

Economists said lower U.S. imports late last year reflected cooling consumer spending.

Other recent reports have painted a mixed U.S. economic picture as the Federal Reserve raises interest rates to battle inflation by slowing growth. Manufacturing output and home salesfell in December. But hiring surged in January and the nation’s gross domestic product grew at a solid 2.9% annual rate last quarter.

In China, an export boom that propelled the world’s second-largest economy through much of the pandemic has sputtered. Exports DecreaseDecreasing exports and increasing imports in December raised the U.S. trade deficit to $67.4 billion.U.S. monthly trade in goods and servicesSource: Census BureauNote: Balance of payments basis; seasonally adjusted2019’20125150175200225250275300325350$375billionExportsImports

China’s exports to the rest of the world fell 9.9% in December compared with a year earlier, a steeper decline than the 8.7% drop recorded in November, according to Chinese customs data, reversing a long spell of surging exports earlier in the pandemic as Western consumers snapped up electronics and other consumer goods while working from home.

Trade also fell in Europe at the end of 2022, reflecting weakening domestic and overseas demand. German imports of goods dropped 6.1% in December from the prior month, while exports fell by 6.3%. In France, imports were 1.9% lower in the fourth quarter compared with the third, while exports were down 0.3%.

The recent trade trends reflect the pandemic’s latest effects, Gregory Daco, chief economist at Ernst & Young LLP, said. “Both supply and demand are rebalancing after a massive shock,” he said.

Mr. Daco said U.S. imports are likely to come “under increased pressure in an environment where consumer spending and business investment growth are moderating,” he added.

Imports of goods and services rose 1.3% in December from the prior month as Americans bought more foreign-made products such as cellphones and vehicles. Weaker demand for U.S. goods such as industrial supplies and consumer products contributed to a 0.9% decline in exports from the prior month.

U.S. imports of goods have broadly fallen since a March 2022 peak.

The December trade deficit was $67.4 billion, the Commerce Department said, up from a revised $61 billion in November. 

Import cargo volume at the nation’s major container ports is expected to drop in February to its lowest level since May 2020, early in the pandemic, as retailers wait to see how the economy responds to efforts to bring inflation under control, The National Retail Federation, a trade group, said Tuesday.

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