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WASHINGTON (AP) — The U.S. trade deficit likely narrowed slightly in November, reflecting stronger growth in exports.
Economists are forecasting the deficit shrank to $41.3 billion in November from October, according to a survey by FactSet. The Commerce Department will release the report at 8:30 a.m. EST Friday.
The trade gap had widened in October to $42.2 billion because exports fell more than imports did, a sign that slower growth could hold back the U.S. economy.
A wider trade deficit acts as a drag on U.S. growth. It typically means the U.S. is earning less on overseas sales of American-produced goods while spending more on foreign products.
Exports hit an all-time high in September, which helped lift economic growth in the July-September quarter to annual rate of 3.1 percent. That is more than double the 1.3 percent annual growth rate in the April-June quarter. Growth during the summer quarter was also helped by stronger rebuilding of business stockpiles than previously estimated.
Most economists say growth slowed from October through December to an annual rate of 2 percent or less. One reason for the expected weaker growth is a decline in exports.
Trade was a modest positive for overall economic growth in 2012 and many economists believe that trend will continue in 2013. However, that forecast is based on a view that the European debt crisis stabilizes and growth in Asia begins to rebound.
In its latest outlook, a forecasting panel for the National Association for Business Economics predicted that the U.S. trade deficit for 2013 will total $533 billion, a slight improvement from the $540 billion deficit they expect when the trade numbers are totaled up for all of 2012. That expectation for a slight improvement is based on a view that export growth will outpace imports in 2013.
Even with the overall improvement, the U.S. deficit with China is expected to keep widening. That should put more pressure on the Obama administration to adopt tougher trade policies with China.
American manufacturers have accused China of keeping its currency undervalued against the U.S. dollar. A lower valued yuan makes Chinese goods cheaper for U.S. consumers and American products more expensive in China.
The Obama administration has lobbied China to move more quickly to allow the yuan to rise in value. But it has refused to cite China as a currency manipulator. That designation would require negotiations between the two nations and could lead to the United States filing a trade case against China before the World Trade Organization.