US Trade Deficit Surges to $56.8B, Damping Economic Outlook
Imports jump 5% while exports fall 3.6%, marking sharp reversal from October's record low
The US trade deficit widened dramatically in November to $56.8 billion, far exceeding analyst expectations and signaling renewed pressure on the world's largest economy as imports surged and exports declined.
The deficit expanded 94.6% from October's $29.2 billion—which had been the smallest gap since 2009—after economists had projected a shortfall of just $43.4 billion. The sharp deterioration reflects both robust consumer demand for foreign goods and weakening overseas appetite for American products.
Imports rose 5.0% to $348.9 billion, the largest monthly increase in two years, led by gains in consumer goods, automobiles, and industrial supplies. The rebound suggests American households and businesses remain in spending mode despite higher interest rates that had been expected to cool demand. Meanwhile, exports fell 3.6% to $292.1 billion, dragged down by declines in pharmaceuticals, aircraft, and agricultural products, as global economic growth shows signs of slowing.
The widening trade gap poses challenges for US economic growth in the fourth quarter. Net exports have been a drag on gross domestic product for much of the past decade, and the November reversal of October's improvement could prompt economists to trim their Q4 GDP estimates. A larger deficit typically subtracts from economic output calculations, offsetting gains from consumer spending and business investment.
"The October trade deficit was artificially compressed by temporary factors, including port labor disruptions and inventory adjustments," said analysts at the Bureau of Economic Analysis in their official release. "The November reading reflects a normalization of trade flows rather than a fundamental deterioration in competitiveness."
Still, the data comes at a sensitive moment for financial markets, which have been assessing whether the Federal Reserve can maintain its restrictive policy stance without triggering a recession. The combination of elevated imports—indicating persistent domestic demand—and falling exports—suggesting weakening external demand—creates a mixed signal for policymakers.
The deficit with China, America's largest trading partner, widened to $25.3 billion from $18.7 billion in October, as imports from China jumped 12% while US exports to the region fell 8%. The trade gap with the European Union also expanded, reaching $16.2 billion.
Looking ahead, economists expect the trade deficit to remain elevated in the coming months as the dollar stays relatively strong, making American goods more expensive abroad while foreign products become more attractive to US buyers. However, some anticipate that the gap may narrow modestly in 2026 if global growth stabilizes and domestic inventory accumulation moderates.
The data was released ahead of the Federal Reserve's next policy meeting, where central bankers will weigh the trade figures alongside employment, inflation, and consumer spending data in determining the path of interest rates.