By Martin Crutsinger

AP Economics Writer

WASHINGTON (AP) — The U.S. trade deficit expanded in November to its widest point in seven months, driven by a surge in imports that outpaced only modest growth in exports.

The Commerce Department report Friday suggests trade will drag on economic growth in the October-December quarter. A wider trade gap slows growth because it means Americans spent more on foreign products while U.S. businesses earned less in overseas sales.

Still, the report showed consumers have maintained an appetite for spending. They kept buying iPhones and other imported goods in November, despite high unemployment and low wage growth.

“A strong rebound in imports is not necessarily all bad for the U.S. economy because it indicates that consumers are spending. It shows the private sector is not dead,” said Gregory Daco, senior economist at HIS Global Insight.

The trade gap widened 15.8 percent to $48.7 billion in November from October, the report noted. Imports grew 3.8 percent, led by gains in shipments of cell phones, including Apple’s new iPhone.

Exports increased only 1 percent. And exports to Europe fell 1.3 percent, further evidence of the prolonged debt crisis that has gripped the region.

Paul Ashworth, chief U.S. economist at Capital Economics, predicts trade trimmed growth by about 0.5 percentage point in the final three months of the year. He expects fourth-quarter growth to be no more than an annual rate of 1.5 percent. That would be nearly half the 3.1 percent rate reported for the July-September quarter, which was helped by healthy growth in exports.

Martin Schwerdtfeger, senior economist at TD Bank, also expects the trade deficit to subtract from October-December growth. But he said the flood of imports could be signaling stronger consumer spending and business investment.