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Economy in Brief

Flat Exports & Soaring Oil Prices = Another Record U.S. Trade Deficit
by Tom Moeller April 12, 2005

The U.S. foreign trade deficit in February surged to another record of $61.0B and exceeded Consensus expectations for a $59.0B deficit. January's figure was little revised.

Total exports were unchanged for the second consecutive month. Goods exports were about flat m/m (9.4% y/y) as a 2.7% m/m gain in industrial supplies and a 3.2% (16.6% y/y) increase in non-auto consumer goods offset declines elsewhere. Capital goods exports fell by 1.3% (+3.3% y/y) for the second consecutive m/m decline and "other" exports fell 1.6% (+1.5% y/y).

Exports of advanced technology products fell for the third month in the last four (-7.2% y/y).

Services exports were about unchanged for the second month (7.1% y/y) though passenger fares (+9.4% y/y) and spending on travel (+5.2% y/y) both fell.

Imports of petroleum imports jumped 10.3% (+32.9% y/y) and lifted total imports by 1.6%. The average price of crude oil jumped to $36.85 per bbl. (+26.3% y/y) and imports of non-petroleum goods rose 0.6% (+16.3% y/y). Capital goods imports fell 2.5 (+14.1% y/y) and nonauto consumer goods imports rose 2.0% (21.0% y/y).

The US trade deficit with China improved m/m in February to $13.9B ($162.0B in 2004) though imports are up nearly 50% y/y). The US trade deficit with Japan deepened to $6.9B ($75.2B in 2004) and the trade deficit with the Asian NICs halved m/m to $1.1B ($21.9B in 2004). The US trade deficit with the European Union deepened to $8.5B ($110.0B in 2004) on a 7.5% y/y gain in imports.

Foreign Trade Feb Jan Y/Y 2004 2003 2002
Trade Deficit $61.0B $58.5B $45.9B (2/04) $617.1B $496.5B $421.7B
  Exports - Goods & Services 0.0% 0.0% 8.7% 12.4% 4.6% -3.1%
  Imports - Goods & Services 1.6% 1.8% 16.8% 16.3% 8.5% 2.1%
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