Trade Deficit Widens Slightly More Than Estimates

- The Trade Deficit for December widened to -$61.2 billion versus estimates of -$59.7 billion in November.

BOTTOM LINE: The US trade deficit increased more than forecast in December as the price of imported petroleum rose and purchases of foreign cars and consumer goods reached records, Bloomberg said. Oil has since declined 7%. The trade deficit with China shrank to $19 billion versus $22.9 billion in November. I expect the trade deficit to only improve modestly over the intermediate-term as commodities fall further, the dollar firms and US growth remains relatively strong versus other developed economies.