The U.S. trade deficit jumped to US$40.1 billion in November, a new record high.

The deficit bounded up from $35.2 billion in October. “This was considerably larger than expected and reflected a 4.9% surge in imports. Exports were also up, but by a more moderate 1.0%,” says Bank of Montreal. “The gain in imports likely reflects a catch up after two months of decline in September and October during which the West Coast labour strike disrupted trade flows.”

CIBC World Markets subscribes to that theory, saying, “Apparently, September-October’s west coast port strike held back more goods than earlier thought, as November saw a flood of imports that swamped expectations for an only modest deterioration in the trade balance.”

“There may still be some catch-up activity waiting in the wings for December, and it is therefore premature to draw conclusions about trade’s contribution to overall Q4 growth. But so far, the results aren’t very pretty,” says CIBC.

In other news, U.S. industrial production registered a 0.2% drop in December, versus an expected 0.2% gain. Along with the trade deficit and an unexpected fall in January’s University of Michigan consumer sentiment index, this report made a trio of weak reports in the U.S.

“The factory slowdown was narrowly based, as activity excluding autos rose 0.2%. The 2.4% decline in fourth quarter production will fuel fears that the economy has lost momentum. Factory operating rates slipped to 75.4% from November’s 75.6% reading,” says BMO Nesbitt Burns.

“Even though several other indicators suggest that the outlook for factory activity is improving, today’s report may renew speculation that the recovery remains elusive,” says Nesbitt.