Unexpected economic news

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The trade deficit in December widened to – $48.8 billion as import growth outpaced export growth. The deficit was somewhat worse than expected.

Economic growth weakens when exports decline because factories tend to produce fewer goods. And U.S. companies earn less.

The economy grew at an annual rate of 2.8 percent in the final three months of 2011. For 2011, it expanded by just 1.7 percent, roughly half the rate in 2010.

For the year, the deficit with China climbed to an all-time high of $295.5 billion, up 8.2 percent from the previous record set in 2010. Both imbalances were the largest ever recorded with a single country. Those deficits, coming at a time of high unemployment, have triggered calls in Congress for a crack-down on what critics see as unfair Chinese trade practices such as the country’s undervalued currency.

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