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Economy in Brief

U.S. Trade Deficit Deteriorates Sharply
by Tom Moeller  July 3, 2013

The U.S. foreign trade deficit increased during May to its deepest in six months. The May deficit of $45.0 billion compared to a little-revised $40.1 billion in April. A $40.0 billion deficit had been expected. A 1.9% rebound (0.7% y/y) in imports caused much of the m/m deterioration. Exports also slipped 0.3% (+1.5% y/y). In chained 2009 dollars, the deficit in goods deepened to $52.3 billion. Real imports increased 3.1% (2.5% y/y) while real exports ticked up just 0.1% (1.1% y/y).

The quantity of petroleum product imports rose 7.4% m/m but fell 0.6% y/y. The price of crude oil slipped m/m to $96.84 from $97.82 and remained down from the $109.69 high last year. Real imports less petroleum increased 2.3% in May (3.2% y/y). Real imports of foods, feeds & beverages gained 3.0% (8.6% y/y). Real auto imports increased 3.4% (5.6% y/y) while real consumer goods excluding autos rose 2.8% (4.9% y/y). The real value of capital goods imports edged up 0.9% (-1.5% y/y). Nominal services imports rose 0.5% (4.0% y/y) as travel imports increased 0.8% (4.9% y/y) and passenger fares gained 2.2% (10.2% y/y).

Real exports of foods, feeds and beverages fell 2.1% (-18.8% y/y) and nonauto consumer goods exports dropped 7.3% (+5.2% y/y). Exports of industrial supplies slipped 0.5% (+2.4% y/y). To the upside, the constant dollar value of  motor vehicle exports gained 2.7% (6.9% y/y) while real capital goods exports jumped 2.0% (0.8% y/y). Services exports again gained 0.7% (5.1% y/y). Travel exports rose 0.4% (8.6% y/y) as the dollar's low value prompted more visits to the U.S. from abroad. Passenger fares increased 3.1% (0.4% y/y).

By country, the May trade deficit in goods with mainland China deepened to $27.9 billion. Exports to China fell 1.9% y/y while U.S. imports increased 4.9% y/y. With Japan, the deficit lessened to $5.4B. U.S. exports rose 1.8% y/y while imports were off by 7.6% y/y. The deficit with the European Union eased slightly to $10.8. U.S. exports fell 1.6% y/y while imports slipped 0.4% y/y.

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 (Current Dollars) May Apr Mar Y/Y 2012 2011 2010
U.S. Trade Deficit $-45.0B $40.1B $37.1B $46.2B
$534.7B $556.8B $499.4B
Exports (%) -0.3 1.3 -1.0 1.5 4.6 14.5 16.9
Imports 1.9 2.4 -3.7 0.7 2.8 13.9 19.5
  Petroleum 4.4 -1.5 -6.5 -11.2 -5.6 30.7 32.5
  Nonpetroleum goods 1.8 3.5 -4.0 2.6 5.2 12.1 20.8
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