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Economy in Brief

U.S. Trade Deficit Deteriorates With Higher Oil Prices
by Tom Moeller  December 11, 2012

The U.S. foreign trade deficit during October deepened to $42.2B from $40.3B in September, revised from $41.5B. A $42.6B deficit had been expected. The deterioration occurred as imports fell 2.1% (-0.8% y/y) versus the 3.6% decline (+1.0% y/y) in exports. In chained 2005 dollars, the deficit in goods was roughly constant m/m at  $46.2B. Real exports fell 4.8% (-2.0% y/y), while real imports were off 3.7% (-1.5% y/y).

Imports of petroleum jumped 7.3% (-1.7% y/y) as the price of crude oil rose to $99.75 from $93.88. In addition, the quantity of petroleum product imports surged 4.9% m/m although they still were down 0.4% y/y. Imports excluding petroleum products fell 4.6% (-0.5% y/y). In constant dollars, imports less oil fell 4.9% (-0.3% y/y) as foods, feeds & beverages imports declined 4.5% (-6.3% y/y. Also down 8.4% (-6.5% y/y) were nonauto consumer goods imports while capital goods imports fell by 1.0% (+2.8% y/y). Services imports slipped 0.6% (+0.4% y/y). However, travel imports fell a greater 2.0% (+2.8% y/y) and passenger fares were off 2.7% (+4.8% y/y).

Real exports fell for the third month in the last four. The 4.8% decline (-2.0% y/y) was led food, feeds and beverages which were off 9.1% (-1.9% y/y). Also, exports of industrial materials and supplies fell 7.4% (-8.1% y/y), capital goods exports dropped 4.1% (+0.9% y/y) and auto exports were off 2.9% (+0.6% y/y). Exports of nonauto consumer goods slipped just 0.7% but were up 2.7% y/y). Services exports slipped 0.6% (+4.4% y/y) although travel exports fell 2.7% (+7.5% y/y) and passenger fares were down 4.7% (+0.7% y/y).

By country, the October goods trade deficit with mainland China deepened m/m to $29.5B. Exports to China rose 11.1% y/y and U.S. imports increased  6.5% y/y. With Japan, the deficit deepened sharply in October to $7.0 billion, its deepest since early 2008. U.S. exports fell 7.5% y/y as imports rose  2.0% y/y. The deficit with the European Union deepened to $10.6B. U.S. exports fell 7.3% y/y but imports rose 2.3%.

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 (BOP Basis) Oct Sep Aug Y/Y 2011 2010 2009
U.S. Trade Deficit $42.2B $40.3B $42.6B $45.7B
$559.9B $494.7B $381.3B
Exports (%) -3.6 3.1 -1.0 1.0 14.2 16.7 -14.5
Imports -2.1 1.5 -0.4 -0.8 13.9 19.5 -23.0
  Petroleum 7.3 0.6 5.2 -1.7 30.7 32.5 -44.0
  Nonpetroleum goods -4.6 2.2 -1.7 -0.5 12.1 20.8 -20.9
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