According to the Commerce Department, the trade deficit reached its narrowest point in almost three years in December — $38.5 billion — suggesting that the economy actually grew last quarter. This comes as a pleasant surprise after the rather ominous GDP report issued last week.
“Trade data for December paint a reassuring and encouraging picture of the U.S. economy at the end of last year,” says Markit chief economist Chris Williamson. Wholesale inventories declined, but not enough to negate December’s positive trade performance. The consensus of both reports points to fourth quarter growth of about 0.5 percent. U.S. exports increased $8.6 billion, and petroleum exports in particular reached record highs.
The National Association of Business Economics said Monday that half of the economists polled in their most recent quarterly survey are optimistic that the economy will grow 2-4 percent this year. Only 36 percent felt this way just three months prior.
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