By Harriet Torry

WASHINGTON -- The U.S. trade deficit hit a 14-year high in November as stores stocked up cellphones and other imported consumer and household goods ahead of the holiday season.

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.

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

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.

The U.S. deficit is "widening for the right reasons," said Joshua Shapiro, chief U.S. economist at consulting firm Maria Fiorini Ramirez Inc., with demand for imports in the U.S. improving and demand for U.S. exports also picking up, just not as much. "Growth is improving here and abroad," he said.

Imports of consumer goods were the highest on record in November, the Commerce Department said. Imports of industrial supplies and capital goods also increased.

"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.

The U.S. usually runs a deficit in goods and a surplus in services such as travel, medical care, higher education, royalties and payments processing. In November, the services surplus was the lowest since August 2012 as borders remained closed and travelers stayed home.

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 -- he 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

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