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Economy in Brief

A Shallower U.S. Trade Deficit in September
by Tom Moeller November 10, 2004

The U.S. foreign trade deficit eased to $51.6B in September from the near record $53.5B in August which was revised shallower due to higher exports. Consensus expectations had been for a deficit of $54.0B.

Total exports grew 0.8% for the second month (+13.3% y/y). Goods exports jumped 1.4% (15.0% y/y) due to broad gains but higher exports of foods & beverages stole the show with a 15.3% m/m gain (+4.0% y/y).

Non auto consumer goods exports also were strong for the second month with a 2.9% (+14.9% y/y) gain and capital goods export rose 1.0% (12.8% y/y).

Total imports fell for the second month in the last three, down 0.8% (17.1% y/y) as petroleum imports fell 4.3% (+42.8% y/y) despite a rise in crude oil prices to an average $37.62/bbl. Crude oil prices rose another $6.00/bbl in October but have since retraced all of that gain. The quantity of energy related petroleum products fell 9.7% in September -1.3% y/y).

Imports of non-petroleum goods rose 0.2% (15.3% y/y). In constant 2000$ nonpetroleum imports fell 0.1% (+15.5% y/y). Foods imports fell 2.6% (+3.7% y/y as did "other" imports by 5.9%. Capital goods imports rose 1.4% (17.6% y/y) but nonauto consumer goods imports fell 0.1% (+9.2% y/y, down for the fifth consecutive month.

The US trade deficit with China deepened to another record of $15.5.0B ($124.1B in 2003). Year over year, exports to China rose 36.6% and imports rose 24.6%. The US trade deficit with Japan eased to $6.1B ($66.0B in 2003) as did the deficit with the European Union which eased to $7.7B ($97.9B in 2003).

"Reflections on China's Economy" from the Federal Reserve Bank of San Francisco is available here.

"Exchange Rate Movements and the U.S. International Balance Sheet" from the Federal Reserve Bank of San Francisco can be found here.

Foreign Trade Sept Aug Y/Y 2003 2002 2001
Trade Deficit $51.6B $53.5B $41.3B(9/03) $496.5B $421.7B $362.7B
  Exports - Goods & Services 0.8% 0.8% 13.3% 4.6% -3.1% -6.0%
  Imports - Goods & Services -0.8% 2.6% 17.1% 8.5% 2.1% -5.5%
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