U.S. posts record trade deficit in 2021

• The Commerce Department said on Tuesday that the trade deficit increased 27.0% last year to an all-time high of $859.1Bn. The deficit was at $676.7Bn in 2020. Chief economist at FWDBONDS in New York has said that the US trade picture won’t return to normal until the pandemic purchases start to slow and life returns to what it was. 
• The trade gap represented 3.7% of gross domestic product, up from 3.2% in 2020. The economy grew 5.7% in 2021, the strongest since 1984 after the government provided nearly $6.0Tn in pandemic relief, which fueled consumer spending on goods. 
• The goods deficit shot up 18.3% to a record $1.1Tn last year. Imports of goods hit an all-time high of $1.8Tn. They were driven by imports of industrial supplies and materials, which increased to their highest level since 2014. Food imports were the highest on record as were those of capital, consumer, and other goods. There were record imports from 70 countries in 2021, led by Mexico, Canada, and Germany. 
• Robust import growth overshadowed a sharp rebound in exports. Goods exports surged 23.3% to a record $1.8Tn. Exports of industrial supplies and materials, foods, consumer goods, other goods, and petroleum were the highest on record. 
• The United States logged record exports to 57 countries last year, led by led by Mexico, which increased to $276.5Bn. Shipments to China rose to $151.1Bn, while exports to South Korea increased to $65.8Bn.

(Source: CNBC News)