JNN 12 Jan 2013 Washington D.C : US Commerce Department says the country’s trade deficit widened by 16 percent to reach USD48.7 billion in November 2012 after a rise in the imports of consumer goods. While A new official report predicts that US government will default on its debt before March 2013.
The department said on Friday that the US deficit in international trade of goods and services, excluding petroleum transactions, was the highest in more than five years.
Falling oil prices were expected to shrink the deficit, but a decline in crude prices was outpaced by other purchases.
US imports increased 3.8 percent to USD231.28 billion, while the biggest gains were in consumer goods. Purchases of cellphones and other related goods increased more than 27 percent and pharmaceutical purchases rose almost 20 percent from October.
In November the inflation-adjusted deficit, which economists use to measure the impact of trade on gross domestic product, hit a record-high since 2008, expanding to USD51.91 billion from USD46.01 billion the month before.
The US goods trade gap with China fell 1.7 percent from October with a drop in exports outweighing a slighter fall in imports.
Imports surged 4.1 percent from the European Union, and were up 6.4 percent from Germany. Overall, seasonally adjusted exports rose one percent.
The US Federal Reserves said last month that it would start pumping more money into the financial system to drive down long-term interest rates and encourage borrowing, spending and investing.
A new official report predicts that US government will default on its debt before March 2013, prompting new pressures on ways to raise the country’s federal debt ceiling.
According to an analysis by the Bipartisan Policy Center, the US government will not be able to pay its bills sometime between February 15 and March 1 of this year, half a month sooner than expected, The Washington Post reports on Tuesday.
The government, the report adds, already reached the USD16.4 trillion legal debt limit on December 31, 2012, “but the Treasury Department is able to undertake a number of accounting schemes to delay when the government runs into funding problems.”
The US Treasury Department has announced that the accounting plan, referred to as “extraordinary measures,” would ordinarily avert a default for nearly two months, the report adds.
However, officials have made it clear that they are unable point to a “precise date” due to “an unusual amount of uncertainty around federal finances,” the daily notes.
“Our numbers show that we have less time to solve this problem than many realize,” Senior Director of Economic Policy at the Bipartisan Policy Center Steve Bell said in a statement. “It will be difficult for Treasury to get beyond the March 1 date in our judgment.”
The report further warns that if the US Congress does not left the debt ceiling by the due deadline, Obama administration officials have said that the country will probably default on its payments.
In a previous instance in 2011 US authorities determined that the best route would be to hold back all of a given day’s federal payments until enough money became available to pay them, according to the report.