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Economy in Brief

U.S. Trade Deficit Deteriorated
by Tom Moeller June 10, 2005

The U.S. foreign trade deficit deepened in April to $57.0B and reversed about half of the prior month's m/m improvement which was revised. Consensus expectations had been for a deficit of $58.0B.

Total exports doubled the prior month's gain and rose 3.0%. Goods exports increased 4.2% (12.7% y/y) to a record high. Exports of capital goods led the gain with a 5.5% jump (12.1% y/y) Exports of advanced technology products fell 4.3% (NSA, +14.2% y/y) after the prior month's one third jump higher. Exports of nonauto consumer goods fell for the second month (+9.1% y/y) but exports of foods, feeds & beverages rose 3.5% (5.3% y/y).

Services exports 0.2% (12.5% y/y).

Total imports recovered all of the prior moth's slump with a 4.1% increase as imports of petroleum products surged 4.3% (48.9% y/y). The average price of crude oil jumped another 8.8% to $44.76 per bbl. (44.4% y/y). Imports of non-petroleum goods recovered all of the prior month's drop with a 5.0% (10.8% y/y) as capital goods imports jumped 7.6% (14.0% y/y).

The US trade deficit with China deteriorated slightly to $14.7B ($162.0B in 2004) due to an 11.8% jump in imports (22.9% y/y). The US trade deficit with Japan improved slightly to $7.2B ($75.2B in 2004) and the monthly trade deficit with the Asian NICs deepened to $0.8B ($21.9B in 2004). The US trade deficit with the European Union eased slightly to $9.3B ($110.0B in 2004).

Yesterday's testimony on the Economic Outlook from Fed Chairman Greenspan can be found here.

Are We Underestimating the Gains from Globalization for the United States? from the Federal Reserve Bank of New York is available here.

Foreign Trade April March Y/Y 2004 2003 2002
Trade Deficit $57.0B $53.6B $48.4B (4/04) $617.6B $494.8B $421.2B
  Exports - Goods & Services 3.0% 1.6% 12.7% 12.6% 4.6% -3.0%
  Imports - Goods & Services 4.1% -3.1% 14.4% 16.6% 8.5% 2.1%
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