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Economy in Brief

U.S. Trade Deficit Deepened Slightly in October
by Tom Moeller December 12, 2007

The U.S. foreign trade deficit deepened slightly to $57.8B from $57.1B in September which was slightly deeper than the deficit initially reported. Consensus expectations had been for a deficit of 57.3B.

The deficit averaged $58.7B during the first ten months of this year compared to an average of $64.0B during the first ten months of 2006.

U.S. exports rose 0.9% after a downwardly revised 0.8% during September. he revision was due a slightly lower gain in services exports

Exports of goods rose 0.7% (14.6% y/y) after a 1.4% jump during September. Exports of capital goods surged 3.4% (10.4% y/y) led by a 21.9% pop in exports of civilian aircraft (37.9% y/y. That rise was offset by a 10.4% decline (+5.1% y/y) in exports of computers while exports of electric apparatus rose 2.2% (4.6% y/y) after two months of sharp decline. Exports of nonauto consumer goods also fell by 3.2% +11.1% y/y).

U.S. exports of services rose 1.4% after a decline of 0.5% during September, initially reported as an increase. Travel exports recovered 1.4% (19.4% y/y) and passenger fares surged 2.2% 16.8% y/y).

Overall imports rose 1.0% as higher oil prices pushed up imports of industrial supplies by 3.6% (16.3% y/y). Imports of nonauto consumer goods also rose a firm 1.1% (4.6% y/y) but capital goods imports fell 1.2% (+6.6% y/y) after a 2.1% September jump.

The U.S. trade deficit in goods with China again deteriorated m/m to $25.9B versus a deficit of $24.4B during October of '06. During the first ten months of this year the deficit with China averaged $21.4B versus $19.1B in 2006. Exports to China rose 13.9% y/y and imports rose 7.6%.

Today's announcement by the Federal Reserve of actions by it, and other Central Banks, designed to address elevated pressures in short-term funding markets can be found here.Is the United States Losing Its Productivity Advantage? from the Federal Reserve Bank of New York can be found here.

Foreign Trade  October September Y/Y 2006 2005 2004
U.S. Trade Deficit $57.8B $57.1B $58.2B
$758.5 $714.4B $612.1B
Exports - Goods & Services 0.9% 0.8% 13.7% 12.7% 10.9% 13.7%
Imports - Goods & Services 1.0% 0.7% 9.2% 10.4% 12.9% 16.8%
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