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Economy in Brief

U.S. Trade Deficit Is Stable -- With China A Record
by Tom Moeller  October 13, 2011

The foreign trade deficit for August held at $45.6B versus a revised $45.6B in July, initially reported as $44.8B. Expectations had been for $46.0B, according to Action Economics. Exports slipped 0.1% (+14.7% y/y) following their 3.4% July jump while imports also slipped negligibly (+11.4% y/y) for the second consecutive month. In chained 2005 dollars, the overall deficit in goods deepened to $47.0B; real exports slipped 0.7% (+6.7% y/y) while real imports ticked up 0.2% (1.9% y/y).

Goods exports were unchanged (+16.6% y/y) during August. Exports of nonauto consumer goods recovered 1.7% (6.5% y/y) but capital goods slipped 0.9% (+11.3% y/y). Exports of foods, feeds & beverages rose 2.2% (14.5% y/y) while automotive vehicles fell 8.2% (16.4% y/y).Services exports were unchanged (9.7% y/y). Travel exports fell 2.3% (+11.4% y/y) as fewer individuals visited the U.S. and passenger fares slipped 0.8% (+25.5% y/y).

Overall imports in August slipped as goods imports were unchanged (+13.2% y/y). Imports of industrial supplies rose 1.4% (+26.7% y/y) but imports of autos fell 3.2% (+8.8% y/y). Other consumer goods imports fell 1.8% (+0.7% y/y) while imports of capital goods slipped 0.6% (+11.1% y/y).Imports of services slipped 0.4% (+2.5% y/y). Travel imports fell 1.9% (+4.6% y/y as fewer U.S. citizens traveled abroad while passenger fares fell 2.0% (+12.8% y/y).

The value of August's petroleum imports rose 2.1% and by nearly one-third y/y with higher prices. That followed sharp declines during the prior two months. The cost of crude oil per barrel slipped m/m to $102.62; in August 2010, the average price was $73.47. During August, the volume of energy-related petroleum imports fell 7.0% y/y.

By country, the goods trade deficit with Mainland China deepened to a record $29.0B. Imports from there increased 5.6% y/y while exports rose 16.6% y/y. With Japan, the deficit worsened to $6.7B, its deepest in three years as exports rose 9.9% y/y but imports rose 13.0% y/y. The deficit with the European Union was roughly unchanged at 9.0B with a 15.8% y/y gain in exports to Europe and a 13.9% rise 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

The minutes to the latest FOMC meeting can be found here.

Foreign Trade Aug July June Y/Y 2010 2009 2008
U.S. Trade Deficit $45.6 $45.6B $51.6B $45.5B
(8/10)
$500.0B $381.3B $698.3B
Exports-Goods & Services $177.6B $177,6B $171.8B $154.9B $1,838B $1,575.0B $1,842.7B
  % Change -0.1% 3.4 -2.2 14.7 16.7 -14.5 11.4
Imports-Goods & Services $2,232B $222.3B $223.4B $196.2B $2,333.8B $1,956.3B $2,541.0B
  % Change -0.0 -0.0 -1.1 11.4 19.5 -23.0 8.1
  Petroleum 2.1 -6.1 -4.9 30.1 32.5 -44.0 37.0
  Nonpetroleum goods -0.4 1.5 -0.3 9.5 20.8 -20.9 1.5
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