By Harriet Torry

WASHINGTON -- The U.S. trade deficit widened in November, as companies restocking shelves ahead of the holiday season boosted demand for imports.

The foreign-trade gap in goods and services expanded 8% from the prior month to a seasonally adjusted $68.14 billion in November, the Commerce Department said Thursday.

That was the highest deficit since August 2006, and the goods deficit was the highest on record. Economists surveyed by The Wall Street Journal had expected a trade deficit of $67.3 billion.

"The fact that the American consumers are back buying a lot of goods means that America's appetite for imported goods is very, very strong," said Chris Rupkey, chief financial economist at MUFG Union Bank. Still, he expects the trade deficit to worsen before it improves because of weak demand for American-made products in regions like Europe hit by the coronavirus pandemic and fresh lockdowns.

Imports increased 2.9% in November to $252.3 billion. Exports, meanwhile, rose 1.2% to $184.2 billion.

Trade has been volatile in recent months. The pandemic initially closed factories and businesses around the world and disrupted supply chains, but industrial production has picked up in recent months. Factories in the U.S., Asia and Europe boosted their output as 2020 drew to a close, aided by a rise in new orders and a revival in trade that has continued despite a sharp rise in coronavirus infections across many large economies.

"Inventory restocking and a strong recovery in capital goods spending are supporting industrial production," said FedEx Corp. Chief Marketing Officer Brie Carere during a Dec. 17 earnings call. She added however that the service sector remains challenged and faces short-term uncertainty against the latest virus surge.

A wider trade deficit subtracts from the calculation of gross domestic product growth. The data for November, the middle month of the fourth quarter, suggest trade will likely be a drag on growth for the quarter as a whole.

In the third quarter, trade subtracted 3.21 percentage point from gross domestic product as imports outpaced exports. GDP -- the value of all goods and services produced across the economy -- increased at a record 33.4% annual rate in the third quarter, adjusted for seasonality and inflation, as the economy recovered from a steep plunge earlier in the year.

Yuka Hayashi contributed to this article.

Write to Harriet Torry at harriet.torry@wsj.com

(END) Dow Jones Newswires

01-07-21 0918ET