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Economy in Brief

U.S. Trade Deficit Improves Slightly
by Tom Moeller  April 12, 2011

The U.S. foreign trade deficit improved during February to $45.8B versus $47.0B in January, revised from $46.3B reported initially. Expectations had been for $44.0B according to Action Economics. Exports fell 1.4% following a 2.6% January increase. Imports fell 1.7%. In chained 2005 dollars, the overall deficit in goods deteriorated to $49.5B from $46.0B in December.

The primary factor causing last month's deficit improvement was lower oil imports. The 4.4% m/m decline reflected a 7.5% drop in petroleum import volumes (-2.1% y/y) which offset a rise in the per barrel cost of crude oil to $87.17 from $84.34 in January. Twelve months earlier, prices averaged $72.92. The total value of crude petroleum imports rose 18.2% y/y but the quantity fell 1.9%.

Overall imports fell 1.7% (+14.4% y/y). Goods imports fell 1.9% (+16.6% y/y) but when adjusted for higher prices, imports fell 3.0% (+9.9% y/y). Nominal imports of foods, feeds & beverages increased 1.7% (20.0% y/y) though when adjusted for higher prices the y/y gain was only 4.0%. Nonauto capital goods imports fell 5.0% (16.7% y/y) and reversed all of the January increase. Virtually all of the y/y gain reflected higher volumes. Nonauto consumer goods imports jumped 5.6% (14.9% y/y) and all of the annual increase was real. Auto imports fell 10.8% (+20.6% y/y). Again, these changes reflect volumes, not prices.

Total exports fell 1.4% (+14.2% y/y) after a strong 2.6% January increase. The 2.3% drop (+17.2% y/y) in goods exports reflected a 9.3% decline (+10.7% y/y) in autos & parts, a 1.5% drop (+21.9% y/y) in foods, feeds & beverages and a 1.4% decline in industrial supplies (+32.3% y/y). Imports of nonauto consumer goods also fell 1.2% in February (+5.8% y/y) but capital goods exports fell 0.8%. Services exports were roughly unchanged (6.5% y/y). Imports of services slipped 0.6% (+3.4% y/y).

By country, the goods trade deficit with China improved to $18.4B as exports rose 23.1% y/y and imports rose 16.8% y/y. (Imports are roughly four times the level of U.S. exports.) The trade deficit with Japan held roughly stable at $5.2B as exports rose 14.5% y/y and imports rose 18.1% y/y. (Imports from Japan are roughly twice the level of U.S. exports.) The trade deficit with the European Union deteriorated to $6.9B as U.S. exports rose 11.8% y/y and imports grew 16.1% y/y. (Imports from Europe are roughly one-third larger than U.S. exports.)

The international trade data can be found in Haver's USECON database. Detailed figures are available in the USINT database. The expectations figure is in the AS1REPNA database.

Inequality and Unsustainable Growth: Two Sides of the Same Coin? from the International Monetary Fund can be found here.

Foreign Trade Feb Jan Dec Y/Y 2010 2009 2008
U.S. Trade Deficit $45.8B $47.0B $40.3B $39.7B
$495.7B $374.9B $698.8B
Exports-Goods & Services (M/M) -1.4% 2.6% 1.9% 14.2% 16.8% -14.6% 11.5%
Imports-Goods & Services -1.7 5.4 2.6 14.4 19.7 -23.3 8.0
 Petroleum -4.4 10.3 17.4 18.0 32.5 -44.0 37.0
 Nonpetroleum -1.3 5.3 0.2 16.3 20.7 -20.9 1.5
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