In other news, the economy probably didn’t shrink during the 4th quarter of 2012 as previously estimated.
According to the Commerce Department, the U.S. trade deficit fell by 21 percent in December to just $38.6 billion, the smallest in three years. That’s because the country was importing less oil and exporting more of other things — particularly refined petroleum products.
That means growth at the end of 2012 was likely stronger than we thought. When the Bureau of Economic Analysis initially calculated fourth-quarter GDP, it assumed that the U.S. trade deficit had actually widened at the end of the year, to about $557.1 billion. In reality, it had stayed mostly unchanged at about $517 billion. Since exports add to GDP and imports subtract, that means GDP was growing faster than calculated.