US trade deficit links to growth

A narrowing in the US trade shortage during December raises hopes that the economy was stronger in the final quarter of 2012 than first estimated. According to the Commerce Department, the US trade gap with the rest of the world fell to $38.5bn in December a near three-year low. The data suggests that the US economy was stronger in the fourth quarter than initially expected.
The information could result in a revision of the a 0.1% annualized contraction in gross domestic product  during the quarter, which was firstly calculated before these figures were available and were based on projections of a widening trade gap. Still, during 2012 the US trade gap with China increased to $315bn - the largest on record with any country. That fact rankles with American manufacturers who think the Chinese benefit from an unfairly weak currency.

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