Another fracking benefit: Trade
Slower foreign demand is also holding back orders for U.S. products. Exports declined 1% to $196.4 billion from $198.3 billion in October.
After eliminating the influence of prices, which generates the numbers used to calculate gross domestic product, the trade deficit narrowed to $47.8 billion compared with $50.1 billion in October. The average so far in the fourth quarter is little changed from the previous three months, indicating trade won’t have much impact on GDP.
A narrowing of the trade deficit in the three months ended in September added 0.8 percentage point to growth, the category’s biggest contribution in three quarters, according to Commerce Department figures.
GDP advanced at a 5 percent annual rate in the third quarter, the strongest gain in 11 years and up from a previously estimated 3.9% pace.
Similar contributions to GDP will be difficult to match in subsequent quarters as faster growth in the U.S. and slower demand among trading partners boosts imports and slows exports.
At the same time, companies including Dearborn, Michigan- based Ford Motor Co. are betting a slowing in exports amid waning global demand won’t spoil a U.S. trend of 3% growth or better this year.
“While the strong dollar does have the potential to put some damper on that, I don’t think it’s going to be a significant factor in terms of offsetting the other positive forces that are supporting overall economic growth this year,” Chief Economist Emily Kolinski Morris said on a Jan. 5 conference call, citing cheaper fuel and job gains among the factors boosting demand.
Lower prices at the pump have been cushioning consumers’ balance sheets since September. The average cost of a gallon of regular gasoline was $2.19 as of Jan. 5, marking 103 consecutive decreases and the cheapest rate since May 2009, according to data from motoring group AAA.
Monthly employment gains are on pace to show their best performance in 2014 in 15 years, further propelling U.S. growth. An average 240,910 jobs were added each month last year through November. December figures from the Labor Department are scheduled for release Jan. 9.