U.S. exports fell in November, capping the biggest four-month decline in more than a decade and signaling trade will contribute little to economic recovery, even as the recession depresses imports.
Exports decreased 15.2 percent from August to November, the most since at least 1992, according to Commerce Department figures released today in Washington. The trade deficit narrowed to $40.4 billion, the smallest since November 2003, as imports fell to the lowest level in three years.
“The key message from this report is bad news,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “It is slim comfort that the U.S. cut its demand for imports more rapidly than the rest of the world cut its demand for U.S. exports. That might cushion the U.S. downturn a little, but it is not a route to recovery.”
American exports and imports are both contracting as the global economy faces the first simultaneous recession in the U.S., Japan and the euro region in the postwar era. While plummeting demand helps trim the nation’s purchases of foreign goods, falling exports of U.S.-made products will hobble American factories and jobs.
Trade has contributed to growth in the U.S., the world’s largest economy, since the first three months of 2007.
Americans bought 12 percent fewer goods and services from abroad, reducing imports to $183.2 billion as demand for foreign crude oil, automobiles, computers and televisions sagged. Exports dropped 5.8 percent to $142.8 billion in November, today’s figures showed. Foreign purchases of automobiles were the lowest since October 2006.
Decline in Trade
“The real story is the contraction in important export volumes that underscores the decline in world trade,” John Ryding, chief economist at RDQ Economics LLC in New York, wrote in a note to clients. “An economy cannot grow its way out of a recession by reducing imports, especially one the size of the U.S.”
Slumping demand for American-made computers and semiconductors contributed to the drop in November exports. Intel Corp., the world’s largest chipmaker, said this month that fourth-quarter sales dropped 23 percent, more than it projected in November, as the global recession intensified.
Intel Chief Executive Officer Paul Otellini, 58, has said he expects the current U.S. recession will be the worst of his lifetime. The Santa Clara, California-based company’s chips run about 80 percent of the world’s PCs, making it a bellwether for technology spending.
To contact the reporters on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
