Net exports look to be holding back fourth-quarter GDP following a second month of deep deficit, at $50.5 billion in November following an upward revised $48.9 billion in October. The monthly average two months into the fourth quarter is $49.7 billion which compares very unfavorably with the third-quarter monthly average of $45.1 billion.
Aside from GDP where imports are a negative, there are substantial signs of strength in today's report. Exports jumped 2.3 percent in the month to $200.2 billion led by a 3.4 percent expansion in goods, to $134.6 billion, though service exports, at $65.7 billion, could manage only a 0.1 percent gain. Exports of capital goods and especially aircraft were very strong with solid gains also posted for vehicles and even consumer goods.
Imports, at $250.7 billion, jumped 2.5 percent in the month and offer definitive evidence that domestic demand is very strong. Details on the import side show what is in fact a sizable and welcome gain in capital goods which points to new business investment in what will help the nation's productivity. Imports of consumer goods, however, also rose and very sharply, up $2.4 billion to $52.4 billion. Oil imports rose nearly $1 billion in the month to $15.7 billion reflecting an increase in both volume and price.
Country data show a small rise in the deficit with China, now at $35.4 billion, and a sharp rise in the deficit with the EU to $14.7 billion. Monthly deficits shrunk with Mexico at $6.0 billion, Japan at $5.8 billion, and Canada at $1.0 billion.
The fourth quarter looks to have been very healthy though the rise in imports, even though it reflects increased domestic demand, will nevertheless hold down fourth-quarter GDP.