WASHINGTON, Feb 13 - The U.S. trade deficit widened nearly 11 percent in December, as strong U.S. economic growth sucked in record imports and exports inched lower despite a weaker dollar, a government report showed on Friday. The near-record monthly trade gap hit an unexpected $42.5 billion, compared to a median analyst forecast of $40.0 billion. The December figures pushed the 2003 trade gap to a record $489.4 billion, up 17 percent from the prior year. The burgeoning trade deficit has put downward pressure on the U.S. dollar, which has the potential to create inflationary pressures as Americans pay more for imported goods.
But in testimony this week before Congress, Federal Reserve Chairman Alan Greenspan seemed comfortable with the dollar's decline, saying foreign companies had so far been able to absorb the impact. He said it would also eventually help contain the huge trade surplus as foreign producers export less to the United States. Still, imports reached a record $132.8 billion in December, led by increases in inflows of petroleum and other industrial supplies. Imports of capital goods such as computer accessories and civilian aircraft, and consumer goods like televisions and pharmaceuticals, also contributed to the month-on-month gain. Imports from the European Union in December hit a record $23.1 billion. U.S. exports were fractionally lower at $90.4 billion. But monthly shipments were still nearly $10 billion above December 2002 levels, a sign the dollar fall had helped exports over the past year.
The record trade gap for all of 2003 included a record bilateral trade deficit of $124 billion with China and $94.3 billion with the European Union. U.S. imports increased 8.3 percent to a record $1.51 trillion in 2003, aided by a record volume and value of crude oil imports and the highest average oil prices since 1984.//