The U.S. trade deficit ballooned in December as import demand increased despite the squeeze on overall trade by ongoing supply chain bottlenecks, the U.S. Commerce Department reported on Wednesday.
The U.S. exported $157.3 billion worth of goods in December, an increase of $2.2 billion from November. At the same time, imports hit $258.3 billion, $5.1 billion more than the amount recorded a month earlier. In total, the overall trade deficit yawned by 3.0% to $101 billion in total.
Supply chain bottlenecks spurned by the COVID-19 pandemic and the impact it has had on transportation and production networks worldwide has been a source of persistent pain for the U.S economy in 2021. It has played a central role in driving up inflation as the overall supply of goods has failed to match the explosion of demand that emerged last year.
In December, the Consumer Price Index (CPI), a key metric used to gauge inflation, reached 7.0% in a sign of the severity of the situation. Other metrics, including the Producer Price Index (PPI) for wholesale goods, found that prices had risen by 9.7% in 2021.
Despite these trends, American consumers and businesses’ appetite for imported goods has not appeared to wane. In fact, the total amount of imports for the first 11 months of 2021 appear to be higher than the entire period of 2019, according to Axios.
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