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Economy in Brief

U.S. Int'l Trade Deficit Deepened Less Than Expected
by Tom Moeller July 12, 2006

The U.S. foreign trade deficit in May again deepened less than expected. The deficit of $63.8B compared to a little revised April gap of $63.3B and Consensus expectations for $64.9B.

During the first five months of 2006 the foreign trade deficit averaged $63.6B versus a $56.4B deficit averaged during the first five months of 2005.

Total exports in May jumped 2.4% after a little revised April slip. A strong 5.2% pop in nonauto consumer goods exports (10.9% y/y) more than recovered the prior month's decline. Capital goods exports also were strong and posted a 2.4% (15.3% y/y) surge following three months of sideways movement. Exports of advanced technology products rose 0.9% (NSA, 16.6% y/y) while exports of industrial supplies & materials rose 3.4% (16.5% y/y).

Imports rose 1.9% during May as petroleum imports surged 16.9% (49.8% y/y). Adjusted for a higher prices, including an 8.7% (43.4% y/y) spike in crude oil to $61.74 per bbl., constant dollar petroleum imports surged 8.2% (3.3% y/y). Crude oil prices fell in June but have since risen to record highs.

Imports of capital goods increased 0.5% (10.9% y/y) reflecting a 6.3% rise in imports of advanced technology products (NSA, 8.8% y/y) and a 0.1% (+3.9% y/y) slip in imports of nonauto consumer goods.

The US deficit in goods trade with China deepened to $17.7B ($201.6B for 2005) but the trade deficit with Japan improved to $7.1B ($82.7B in 2005). The trade deficit with the Asian NICs more than doubled to $1.7B ($15.9B in 2005) and the deficit with the European Union deepened to $10.8B ($122.4B in 2005).

The Mid-Session Review of the U.S. Government Budget for FY 2007 is available here.

Foreign Trade May April Y/Y 2005 2004 2003
Trade Deficit $63.8B $63.3B $56.6B (5/05) $716.7B $611.3B $494.9B
  Exports - Goods & Services 2.4% -0.0% 12.6% 10.7% 13.4% 4.2%
  Imports - Goods & Services 1.8% 0.8% 12.7% 13.0% 16.7% 8.3%
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