Trade Deficit in Goods Jumps Past $1 Trillion For First Time Ever

US President Joe Biden speaks during the US Conference of Mayors 90th Annual Winter Meeting in Washington, DC, January 21, 2022. (Photo by SAUL LOEB/AFP via Getty Images)
SAUL LOEB/AFP via Getty Images

The U.S. trade deficit in goods rose above $1 trillion for the first time ever in 2021, topping the record-high $893.5 billion hit in the prior year.

Running a trade deficit in goods means that the U.S. economy leaks income to the rest of the world, increasing sales abroad while decreasing sales from U.S. manufacturers.

The deficit in goods increased 3 percent in December to $101 billion from $98 billion, the largest ever monthly increase. Economists had forecast a decline in the trade deficit to $95 billion from November’s $98 billion.

The massive amount of debt-fueled government stimulus has helped pump up demand from U.S. households. A significant portion of that has leaked out to foreign goods producers of appliances, games, computers, smart phones, and similar items.

Demand for U.S. exports has lagged because other countries have not recovered as quickly and U.S. tariffs remain low by historical standards.

Exports climbed 1.4 percent to $157.3 billion in December. Imports rose two percent after climbing five percent in November.


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