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Economy in Brief

U.S. Trade Deficit Deepest Since Last August, Oil Imports Surged
by Tom Moeller January 11, 2008

The U.S. foreign trade deficit deepened to $63.1B in November from an unrevised $57.8B during October. Consensus expectations had been for a deficit of $60.0B.

During the first eleven months of 2007 the deficit averaged $59.1B versus an average of $63.5B during the first eleven months of 2006.

U.S. exports rose 0.4% after an unrevised 0.9% gain during October. During the first eleven months of last year exports rose 12.3%.

Exports of goods ticked up just 0.1% (13.7% y/y) after a 0.5% advance during October. The latest was the smallest rise since a slight decline last April. Exports of capital goods reversed much of an October surge with a 2.3% (+6.1% y/y) drop. Exports of civilian aircraft (-2.4% y/y) reversed nearly all of an 18.7% drop. Exports of computers surged 8.6% (22.3% y/y) but nonfood exports less autos fell 0.9% (+8.9% y/y).

U.S. exports of services rose another strong 1.3% (11.4 y/y). Travel exports jumped again by 1.1% (21.2% y/y) and passenger fares surged 2.1% (18.1% y/y).

Overall imports surged 3.0% as higher oil prices raised petroleum imports by 16.3%. The quantity of energy related products fell 3.3% (+3.1% y/y) but the per barrel price of crude petroleum surged 9.9% (52.5% y/y). Imports of nonauto consumer goods surged 2.0% (4.1% y/y) after a strong 1.2% October gain but capital goods imports rose just 0.4% (5.9% y/y) after a 1.4% October decline.

Imports of services rose 0.4% (8.3% y/y) after a 1.0% October increase.

The U.S. trade deficit in goods with China improved slightly m/m to $24.0B. During the first eleven months of 2007 the deficit with China averaged $21.6B versus $19.4B in 2006. Exports to China rose 20.9% y/y and imports rose 7.2%.

Yesterday's speech titled Financial Markets, the Economic Outlook, and Monetary Policy by Federal Reserve Chairman Ben S. Bernanke can be found here.

Foreign Trade  November October Y/Y 2006 2005 2004
U.S. Trade Deficit $63.1B $57.8B $58.5B
(11/06)
$758.5 $714.4B $612.1B
Exports - Goods & Services 0.4% 0.9% 13.0% 12.7% 10.9% 13.7%
Imports - Goods & Services 3.0% 1.0% 11.4% 10.4% 12.9% 16.8%
  Petroleum 16.3% 8.4% 55.5% 20.1% 39.6% 35.6%
  Nonpetroleum Goods 1.0% -0.4% 4.8% 9.1% 10.3% 14.7%
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