By Courtney Schlisserman
Jan. 13 (Bloomberg) -- The U.S. trade deficit probably shrank in November to the lowest level in more than four years as oil prices plunged, economists said before a report today.
The gap narrowed to $51 billion, the smallest since May 2004, from $57.2 billion in October, according to the median forecast of economists surveyed by Bloomberg News. Another report may show the Treasury ran the largest budget deficit for any December on record.
World trade is likely to contract as commodity prices fall and the credit crunch causes consumers and businesses worldwide to pare spending, deepening the economic slump. President-elect Barack Obama faces growing fissures with trading partners as U.S. steel and textile companies seek to slow imports while automakers get government loans to avoid bankruptcy.
“If you take away oil, what you’re seeing predominantly is weakness on both sides of the ledger,” said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut. “Exports and imports are both falling.”
The Commerce Department’s trade figures are due at 8:30 a.m. in Washington. The median was based on 66 estimates in a Bloomberg survey that ranged from gaps of $39 billion to $58 billion.
Figures from the Treasury Department, due at 2 p.m. in Washington, may show the budget gap swelled in December to an $83 billion deficit from a $48.3 billion surplus for the same month last year, according to the survey median.
Plunging oil prices were at the center of economists’ trade projections. The cost of imported petroleum dropped a record 26 percent in November, according to Labor Department data.
Fewer Barrels
The number of barrels of crude imported also probably dropped after demand surged in October following hurricane- related shortfalls in prior months, Stanley said.
During the election campaign Obama pledged to take a harder line against China by forcing it to raise the value of its currency, and by accepting industry petitions to impose quotas, called safeguards, on Chinese imports, reversing Bush administration policy. Textile, steel and other U.S.-based manufacturers say they want Obama to make good on those pledges.
China’s economy will expand 7.5 percent this year, the slowest pace in almost two decades, as the global financial crisis worsens, according to a forecast from the World Bank. The lender also projects international trade will shrink this year for the first time in more than a quarter century.
‘Trade War’
Obama faces “a trans-Atlantic trade war” should his economic policies focus on preserving “outdated structures” of U.S. carmakers, a member of German Chancellor Angela Merkel’s Christian Democrats said yesterday. General Motors Corp. is to receive $13.4 billion and Chrysler LLC $4 billion in loans from the U.S. Treasury in return for restructuring to assure their long-term viability.
Deliveries by Boeing Co. to buyers overseas continued to weaken in November as the world’s second-biggest airplane maker recovered from a two-month strike that was resolved Nov. 1. Boeing shipped three aircraft to foreign buyers during the month, down from four in October, six in September and 23 in August, according to company data.
The Chicago-based planemaker said Jan. 9 it plans to cut about 4,500 jobs, or 6.6 percent of its commercial-aircraft workforce, this year to reduce costs as the weakening global economy hurts demand for new planes.
“We are taking prudent actions to make sure Boeing remains well positioned in today’s difficult economic environment,” Scott Carson, the head of Boeing Commercial Airplanes, said in a statement.
Faltering growth overseas is likely to hurt demand for American-made goods in coming months. The Institute for Supply Management’s manufacturing export gauge fell to a record in December, the purchasers’ group said this month.
Bloomberg Survey
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Trade Federal
Balance Budget
$ Blns $ Blns
=============================================
Date of Release 01/13 01/13
Observation Period Nov. Dec.
---------------------------------------------
Median -51.0 -83.0
Average -51.1 -70.2
High Forecast -39.0 -26.0
Low Forecast -58.0 -90.0
Number of Participants 66 34
Previous -57.2 48.3
---------------------------------------------
4CAST Ltd. -46.2 -83.0
Action Economics -44.0 -45.0
AIG Investments -53.0 ---
Aletti Gestielle SGR -53.2 ---
Argus Research Corp. -53.5 ---
Banc of America Securitie -48.5 -85.0
Bank of Tokyo- Mitsubishi -56.8 -83.0
Barclays Capital -51.0 -75.0
BMO Capital Markets -51.0 ---
BNP Paribas -48.4 -50.0
Calyon -53.0 -83.0
CIBC World Markets -55.0 ---
Citi -49.0 -83.0
ClearView Economics -54.0 ---
Commerzbank AG -47.0 ---
Credit Suisse -50.0 ---
Daiwa Securities America -54.0 -80.0
DekaBank -51.5 ---
Desjardins Group -51.8 -85.0
Deutsche Bank Securities -55.0 -50.0
Deutsche Postbank AG --- -52.5
Dresdner Kleinwort -48.0 -26.0
DZ Bank -55.0 ---
First Trust Advisors -52.8 -84.3
Fortis -48.5 ---
Goldman, Sachs & Co. -50.0 -85.0
Helaba -50.0 -83.0
Herrmann Forecasting -51.8 -85.3
High Frequency Economics -51.0 ---
HSBC Markets -53.0 -83.0
IDEAglobal -52.5 ---
IHS Global Insight -42.7 ---
Informa Global Markets -52.0 -35.0
ING Financial Markets -49.8 -40.0
Insight Economics -52.0 -83.0
Intesa-SanPaulo -50.0 ---
J.P. Morgan Chase -48.9 -83.0
Landesbank Berlin -39.0 ---
Landesbank BW -54.5 ---
Lloyds TSB -50.0 ---
Maria Fiorini Ramirez Inc -51.0 -83.0
Merrill Lynch -50.2 -90.0
Mizuho Securities -54.0 -38.0
Moody’s Economy.com -53.5 ---
Morgan Keegan & Co. -53.5 ---
Morgan Stanley & Co. -50.0 ---
National City Bank -50.2 ---
Natixis -52.5 ---
Nomura Securities Intl. -55.2 -75.0
Nord/LB -51.0 ---
PNC Bank -53.5 ---
Raymond James -55.9 -83.0
RBS Greenwich Capital -47.0 -90.0
Ried, Thunberg & Co. -51.0 ---
Schneider Foreign Exchang -49.2 ---
Scotia Capital -52.0 ---
Societe Generale -49.0 ---
Stone & McCarthy Research -54.5 ---
TD Securities -50.0 ---
Thomson Financial/IFR -58.0 -83.0
UBS Securities LLC -50.0 -85.0
University of Maryland -46.0 -36.0
Wachovia Corp. -50.5 ---
Wells Fargo & Co. -54.0 ---
WestLB AG -53.0 -50.0
Westpac Banking Co. -47.0 -47.0
Wrightson Associates -51.0 -83.0
=============================================
To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net
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