The Commerce Department said that the foreign-trade gap for goods and services dropped 3.2% from November 2016 to $44.26 billion in December, which was lower than previous expectations of decreasing $44.7 billion.
In December, exports of goods and services rose 2.7%, compared with that in November, to $190.7 billion, which was the highest level since April 2015. The increase in exports was due to the increased shipments of advanced technology goods. At the same time, imports of goods and services also rose 1.5% to $235 billion in December, which was the highest level since March 2015. The rise included the increase in car imports and reflected the increasing oil prices.
However, even though exports increased a lot in December, it is still limited by the strong dollar, which gained 4.4% against the currencies of main partners of the United States.
For the full year 2016, the trade deficit increased 0.4% from $500.36 billion in 2015 to $502.25 billion, which was the highest level since 2012.
“We expect the nominal trade deficit to continue to widen over the coming months, as the price of imported oil continues to rise,” said Andrew Hunter, the U.S. economist at Capital Economics. “However, with the drag from the dollar’s sharp appreciation in 2014 and 2015 now fading, and the survey evidence having improved markedly on the back of the recent pick-up in global demand, exports should continue to strengthen.”