The figures used to calculate gross domestic product, which eliminate the influence of prices, showed the trade deficit narrowed to $44.6 billion in November, a five-month low. The fourth-quarter average so far is smaller than in the previous three months, indicating trade boosted gross domestic product.
The U.S. economy expanded more than previously reported in the third quarter, with GDP rising at a 4.1% annualized rate, Commerce Department figures showed Dec. 20. An initial reading showed a 2.8% rate of expansion in the three months ended September and a second release estimated a 3.6% pace.
Estimates for the fourth quarter have improved as data showed consumer spending was picking up and manufacturing was strengthening. GDP grew at a 2.6% annualized rate between October and December, according to the most recent tracking estimate by economists at Macroeconomic Advisers in St. Louis, up from a projected 1.5% as recently as December 10.
A pickup at U.S. factories is helping to support the expansion, now in its fifth year. Manufacturing grew in December at the second-fastest pace in more than two years. The Institute for Supply Management’s factory index eased to 57 from the prior month’s 57.3, which was the highest since April 2011, the Tempe, Arizona-based group said last week.
Orders reported by purchasing managers were the strongest since April 2010 and an employment gauge reached its highest level since June 2011 in the ISM data.
Dennis Muilenburg, president and chief operating officer of Chicago-based Boeing, is among executives who are optimistic about business abroad. The planemaker collects about 30% of its revenue outside the U.S., which Muilenburg predicts will be a stable share “for the long term.”
“It’s not just a wave of exports, it’s something we can sustain for the long run,” Muilenburg said at a Dec. 4 conference. “Even in a tough budget environment, we’re only seeing increases here in terms of security needs.”
Manufacturing across the globe showed signs of uneven growth in December, according to other reports. In the euro area, an index of factory activity climbed to 52.7 from a November reading of 51.6, Markit Economics said. Manufacturing in Germany increased, while a gauge of factories in France dropped to a seven-month low. An index of U.K. manufacturing cooled as export demand weakened, and readings in China slipped.
The trade gap with China, the world’s second-biggest economy, narrowed to $26.9 billion from $28.9 billion in October, today’s report showed. Exports to China were the highest on record.