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Economy in Brief

U.S. Trade Deficit Narrows as Exports and Imports Both Decline
by Carol Stone  March 6, 2015

The U.S. foreign trade deficit in goods and services decreased to $41.8 billion in January from December's $45.6, revised from $46.6 billion. This January net result was almost exactly equal to the $42.0 billion expected in the Action Economics Forecast Survey.

Imports fell back in January by 3.9% (-0.2% y/y) after December's 1.8% increase. Both petroleum and nonpetroleum goods shared in the decline. Petroleum fell a substantial 21.9% (-37.3% y/y), reflecting the widely publicized crude oil price drop, which amounted to 19.9% in the one month, to $58.96 per barrel from $73.64 in December. The quantity of energy-related petroleum imports also fell, by 6.5% (-6.0% y/y) after December's surge of 31.7%. Nonpetroleum goods imports fell 1.1% in January (+6.8% y/y) and imports of services fell 1.3% (+5.7% y/y).

Overall exports fell 2.9% after a 0.9% December decline, and the January amount was down 1.7% y/y. Exports of goods were down 4.1% (-3.9% y/y) and exports of services were off 0.1% in the month (+3.1% y/y).

In constant 2009 dollars, imports of goods were down 1.6% in January (+5.2% y/y) and exports of goods fell 2.0% (+2.9% y/y).

The decline in real merchandise exports encompassed four major end-use groups: food, feed & beverages dropped 7.8% (-4.7% y/y), autos & parts were down 6.9% (+2.8% y/y), and capital goods ex autos fell 1.1% (+1.9% y/y), while "other" fell 17.6% (+12.3% y/y). Consumer goods exports other than autos rose 1.5% (+9.2% y/y), and industrial materials & supplies gained 1.4% (+3.2% y/y). On the import side, there were declines in consumer goods, 4.0% (+4.2% y/y), "other", 3.6% (+13.6% y/y), industrial materials & supplies, 2.6% (+1.6% y/y) and autos & parts, 1.4% (+10.7% y/y). There were gains in food, feed & beverages, 5.2% (+8.0% y/y) and capital goods, 0.5% (+6.2% y/y).

By country, the deficit in goods with China was $28.6 billion in January, almost unchanged from December's $28.3 billion. Imports from China actually edged down 0.1% y/y while exports were down 7.8%. The trade deficit with Japan was similarly stable month-on-month, at $5.8 billion in January versus $5.7 billion the month before. Exports to Japan dropped 7.7% y/y, and imports were up a mere 0.1% y/y. The trade deficit with the European Union improved to $9.3 billion in January from $13.6 billion in December and was the smallest since last February. Exports to Europe were up 3.6% y/y, and imports were up 4.2% 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 Forecast Survey, which is carried in the AS1REPNA.

Foreign Trade (Current Dollars) Jan Dec Nov Y/Y 2014 2013 2012
U.S. Trade Deficit $41.8 bil. $45.6 bil. $39.5 bil. $38.8 bil.
(1/14)
$505.0 $476.4 bil. $537.6 bil.
Exports (% Chg) -2.9 -0.9 -1.0 -1.7 2.9 2.9 4.2
Imports -3.9 1.8 -1.8 -0.2 3.4 0.1 2.9
  Petroleum -21.9 7.2 -11.3 -37.3 -9.6 -11.0 -5.5
  Nonpetroleum goods -1.9 1.0 -0.8 5.8 6.0 2.0 5.2
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