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Economy in Brief

U.S. Trade Deficit Shrinks Again
by Tom Moeller December 9, 2011

The U.S. foreign trade shortfall lessened for the fourth consecutive month during October. The deficit fell to $43.5B from a revised $44.2B in September, initially reported as $43.1B. Expectations had been for $43.7B according to Action Economics. Exports declined 0.8% (+16.3% y/y) while imports fell 1.0% (+11.9% y/y). In chained 2005 dollars, the overall deficit in goods improved to $44.2B; real exports rose 1.2% (6.9% y/y) while real imports ticked down 0.3% (+3.4% y/y).

Overall exports slipped 0.8% led by a 1.2% (+13.5% y/y) decline in goods exports. Exports of nonauto consumer goods fell 3.6% (+5.4% y/y) while capital goods imports rose 1.1%  (10.0% y/y). Exports of automotive vehicles slipped 0.5% (+15.2% y/y). Services exports ticked 0.1% higher (9.5% y/y). Travel exports fell 1.0% (+11.9% y/y) as fewer individuals visited the U.S. and passenger fares fell 1.7% (+18.4% y/y).

Total imports declined 1.0% in October as goods imports fell 1.2% (+12.9% y/y). Imports of industrial supplies fell 5.5% (+24.4% y/y) but imports of nonauto consumer goods imports jumped 1.7% (2.1% y/y) following five straight months of decline. Imports of capital goods jumped by 2.7% (11.2% y/y) while auto imports fell 2.8% (+11.1% y/y). Imports of services ticked 0.2% higher and by 5.9% y/y. Travel imports slipped 0.3% (+5.5% y/y) as fewer U.S. citizens traveled abroad while passenger fares fell 2.7% (+8.1% y/y).

The value of October's petroleum imports declined 5.0% but rose 31.9% y/y with higher prices. In constant dollars, petroleum imports fell 2.8% and by 0.4% y/y. The cost of crude oil per barrel fell to $98.84, down for the fifth month in a row. In October 2010, the average price was $74.21. During October, the quantity of energy-related petroleum imports fell 1.0% y/y.

By country, the October goods trade deficit with Mainland China was stable m/m at $28.1B. However, that remained near the record and increased from $25.7B twelve months earlier. Imports from China increased 7.8% y/y to $37.8B while U.S. exports rose 3.7% y/y to $9.7B. With Japan, the deficit deepened to $6.2B as exports rose 10.5% y/y and imports rose 9.4% y/y. The deficit with the European Union deepened to $8.0B with a 7.2% y/y rise in exports to Europe and a 9.3% 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

Foreign Trade Oct Sep Aug Y/Y 2010 2009 2008
U.S. Trade Deficit $43.5B $44.2B $45.3B $39.5B
$500.0B $381.3B $698.3B
Exports-Goods & Services $179.2B $180.6B $178.0B $159.5B $1,838B $1,575.0B $1,842.7B
  % Change -0.8 1.4 0.1 12.3 16.7 -14.5 11.4
Imports-Goods & Services $222.6B $224.8B $222.3B $199.0B $2,333.8B $1,956.3B $2,541.0B
  % Change -1.0 0.6 -0.2 11.9 19.5 -23.0 8.1
  Petroleum -5.0 1.1 1.8 31.9 32.5 -44.0 37.0
  Nonpetroleum goods -0.2 0.4 -0.7 9.2 20.8 -20.9 1.5
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