Workers continued to apply for unemployment aid at an elevated level at the end of 2020 and holiday-season demand for imported consumer products pushed the November trade deficit in goods to a record, signs of the uneven economic recovery.
The foreign-trade gap for goods in November was the highest on records going back to 1992. The overall deficit for goods and services expanded a seasonally adjusted 8% from October to the highest level since August 2006, the Commerce Department said Wednesday. The data reflects that consumers’ demand for imports outpaced global demand for U.S. exports.
Job losses in the past year have been particularly severe among lower-earning restaurant, hotel and mall-retail workers. Meanwhile, workers in other areas were more likely to shift to working from home and have maintained incomes to help drive demand for goods, while spending less on dining out, travel and other services.
Imports of consumer goods reached the highest level on record in November, led by increased shipments of cellphones, appliances, jewelry and toys, the Commerce Department said.
“It’s been a very unequal pandemic economy,” Scott Brown, chief economist at Raymond James, said. “We had a lot of job losses in lower-paying service industries, but those workers aren’t typically big spenders.” He noted the top 20% of income earners account for more than half of consumer spending.
A surge in Covid-19 cases and renewed lockdowns in some areas are likely to restrain near-term economic activity, Mr. Brown said. “If we get vaccinations rolled out, then we’re in line for a significant rebound in the second half of the year.”