WASHINGTON (AP) -- The Commerce Department reports on the U.S. trade deficit for January. The report will be released Friday at 8:30 a.m. Eastern.
GAP NARROWS: The expectation is that the trade deficit fell to $42 billion in January, according to the consensus tracked by the Bank of America. That would follow a sharp 17.1 percent jump in December to $46.6 billion as exports plummeted.
EXPORTS AND IMPORTS: Much of the dip in the trade deficit likely came from a drop-off in imports due to lower oil prices and a labor dispute that disrupted shipping at West Coast ports. But the strong dollar that has made American-made goods less affordable abroad is weighing down exports, which tumbled 0.8 percent in December.
The trade deficit reached $505 billion last year, up 6 percent from the 2013 deficit of $476.4 billion. It was the largest imbalance since 2012. Economists expect the deficit to widen further in 2015 as stable growth in the United States drives imports and tepid growth overseas paired with a strong dollar depress exports.
The politically sensitive deficit with China set another record last year, surging 23.9 percent to $342.6 billion. That constant gap has created pressure on Congress and the Obama administration to take tougher actions against what critics see as China's unfair trade practices. U.S. manufacturers say that China is manipulating its currency to keep it artificially low against the dollar, which benefits Chinese exporters while creating a barrier for U.S goods.
Yet a domestic energy boom has kept the deficit in check.
Not only have oil costs plunged since June, but the U.S. production made possible by fracking has reduced dependence on foreign oil. For 2014, petroleum imports fell 9.6 percent to $334.1 billion, the lowest level since 2009. U.S. petroleum exports jumped 5.9 percent to a record $45.7 billion.
- Politics & Government
- Budget, Tax & Economy
- trade deficit