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Economy in Brief

U.S. Trade Deficit Falls As Exports Jump
byTom Moeller   September 8, 2011

The foreign trade deficit narrowed to $44.8B in July from a revised $51.6B in June, initially reported as $53.1B. Expectations had been for $51.0B, according to Action Economics. Exports jumped 3.6% and more-than-recovered the June loss while imports slipped 0.2% after a 1.1% June drop. In chained 2005 dollars, the overall deficit in goods narrowed to $45.3B, the shallowest since April; real exports dropped jumped 4.9% (6.6% y/y) while and real imports slipped another 0.2% (+3.6% y/y).

The $3.6% increase in July exports reflected a 4.7% rise in goods. Exports of capital goods rose 5.5% (8.8% y/y) but nonauto consumer goods fell 4.2% (+5.7% y/y). Exports of foods, feeds & beverages slipped 0.2% (+24.5% y/y) but automotive vehicles jumped 11.7% (29.1% y/y).

Services exports jumped 1.0% (10.2% y/y). Travel exports rose 2.7% (14.6% y/y) as more individuals visited the U.S. and passenger fares rose 5.1% (17.4% y/y).

Overall imports slipped 0.2% as goods imports were off 0.3% (+15.5% y/y). Imports of industrial supplies fell 3.8% (+26.2% y/y) with the drop in oil prices. Imports of autos rose 15.0% (14.8% y/y) while other consumer goods imports edged up 0.2% (5.5% y/y). Imports of capital goods rose 0.6% (15.0% y/y).

The value of July's petroleum imports fell 6.5% but still was up nearly one-third y/y. That followed June's 4.9% drop. The cost of crude oil per barrel slipped m/m to $104.27; in July 2010, the average price was $72.09. July's volume of energy-related petroleum imports dropped 9.0% y/y.

Imports of services ticked up 0.4%, putting them up 3.0% versus a year ago. Travel imports rose just 1.4% (5.5%) as U.S. citizens shied away from traveling abroad while passenger fares rose 3.6% (11.3% y/y).

By country, the goods trade deficit with China widened slightly to $27.0B. Imports from there were up 5.6% y/y and exports rose 11.4%. With Japan, the deficit narrowed to $5.2B as exports rose 3.7% and imports rose 4.7%. The deficit with the European Union eased to $8.9B with a 13.8% y/y gain in exports to Europe and just a 6.2% gain in imports.

The international trade data can be found in Haver's USECON database. Detailed figures are available in the USINT database. The expectations figures are from the Action Economics consensus survey, which is carried in the AS1REPNA database.

Consumer Goods From China Are Getting More Expensive from the Federal Reserve Bank of New York is available here.

Foreign Trade July June May Y/Y 2010 2009 2008
U.S. Trade Deficit $44.8B $51.6B $50.2B $41.6B
$500.0B $381.3B $698.3B
Exports-Goods & Services $178.0B $171.8B $175.7B $151.3B $1,837.6B $1,575.0B $1,842.7B
  % Change 3.6 -2.2 -0.3 15.1 16.7 -14.5 11.4
Imports-Goods & Services $222.8B $223.4B $225.9B $196.2B $2,337.6B $1,956.3B $2,541.0B
  % Change -0.2 -1.1 2.9 13.6 19.5 -23.0 8.1
  Petroleum -6.5 -4.9 10.8 31.9 32.5 -44.0 37.0
  Nonpetroleum goods 1.3 -0.3 1.2 12.2 20.8 -20.9 1.5
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